Internal Revenue Bulletin 2023-43 (PDF rendition): IRS Revenue Procedures

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Bulletin No. 2023–43
October 23, 2023
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.
ADMINISTRATIVE
REG-106203-23, page 1143.
Tax return preparers must use a preparer tax identification
number (PTIN) on returns they prepare for compensation. The
PTIN must be renewed annually. The IRS charges a user fee
on each PTIN application or application for renewal to recover
costs for issuing and renewing PTINs. The IRS has recalcu-
lated the PTIN user fee and determined the full cost for each
application or application for renewal is $11, plus an amount
payable directly to a third-party contractor. These regulations
therefore propose to decrease the current PTIN user fee of
$21 to $11, plus an amount payable directly to the third-party
contractor. REG-106203-23. Published October 4, 2023.
Rev. Proc. 2023-28, page 1092.
General Rules and Specifications for Substitute Forms and
Schedules
This procedure provides guidelines and general require-
ments for the development, printing, and approval of the
2023 substitute tax forms. This procedure will be repro-
duced as the next revision of Publication 1167. Rev. Proc.
2022-31 is superseded.
T.D. 9980, page 1087.
Tax return preparers must use a preparer tax identification
number (PTIN) on returns they prepare for compensation. The
PTIN must be renewed annually. The IRS charges a user fee
on each PTIN application or application for renewal to recover
costs for issuing and renewing PTINs. The IRS has recalcu-
lated the PTIN user fee and determined the full cost for each
application or application for renewal is $11, plus an amount
payable directly to a third-party contractor. These interim final
regulations therefore decrease the current PTIN user fee of
$21 to $11, plus an amount payable directly to the third-party
contractor. TD 9980. Published October 4, 2023.
INCOME TAX
REG-113064-23, page 1144.
These proposed regulations would provide guidance for
elections to transfer clean vehicle credits under §§ 30D(g)
and 25E(f), as established by the Inflation Reduction Act of
2022 (IRA). The proposed regulations provide guidance for
taxpayers intending to transfer the previously-owned clean
vehicle credit and the new clean vehicle credit to dealers
who are entities eligible to receive advance payments of
either credit. The proposed regulations also provide guid-
ance for dealers to become eligible entities to receive
advance payments of new or previously-owned clean vehicle
credits. The proposed regulations also provide guidance for
the recapturing of the credit under § 30D and 25E. Finally,
proposed § 1.6213-2 defines the omission of a correct VIN
for purposes of § 6213.
Rev. Proc. 2023-33, page 1135.
This revenue procedure sets forth the procedures under
§§ 30D(g) and 25E(f) of the Code for the transfer of the
clean vehicle credit and previously-owned clean vehicle
credit from the taxpayer to an eligible entity, including the
procedures for dealer registration with the Internal Revenue
Service (IRS), the procedures for the suspension and revo-
cation of that registration, and the establishment of an
advance payments program to registered dealers. This rev-
enue procedure also supersedes sections 5.01 and 6.03
of Rev. Proc. 2022-42, 2022-52 I.R.B. 565, providing new
information for the timing and manner of submission of
seller reports, respectively; as well as sections 6.01 and
6.02 of Rev. Proc. 2022-42, providing updated information
on submission of written agreements by manufacturers to
the IRS to be considered qualified manufacturers, as well as
the method of submission of monthly reports by qualified
manufacturers.
Finding Lists begin on page ii.

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 offi-
cial 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 sub-
stantive 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 inter-
nal 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 rul-
ings 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
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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, 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.
October 23, 2023 Bulletin No. 2023–43

Part I
26 CFR 300.11: Fee for obtaining a preparer tax
identification number
T.D. 9980
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 300
Preparer Tax Identification
Number (PTIN) User Fee
Update
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Interim Final Rule.
SUMMARY: This document contains
interim final regulations relating to the
imposition of certain user fees on tax
return preparers. These regulations reduce
the amount of the user fee to apply for or
renew a preparer tax identification number
(PTIN) and affect individuals who apply
for or renew a PTIN. The Independent
Offices Appropriation Act of 1952 autho-
rizes the charging of user fees. The text of
the interim final regulations also serves
as the text of the proposed regulations set
forth in the notice of proposed rulemaking
on this subject in this issue in the Proposed
Rules section of this edition of the Federal
Register.
DATES:
Effective date: These regulations are
effective on October 19, 2023.
Applicability date: For date of applica-
bility, see paragraph (d) of these interim
final regulations.
FOR FURTHER INFORMATION
CONTACT: Concerning the interim
final regulations, Jamie Song at (202)
317-6845; concerning cost methodology,
Michael A. Weber at (202) 803-9738 (not
toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
This document contains interim final
amendments to 26 CFR part 300 regard-
ing user fees.
A. User Fee Authority
The Independent Offices Appropriation
Act of 1952 (IOAA), which is codified at
31 U.S.C. 9701, authorizes agencies to
prescribe regulations that establish user
fees for services provided by the agency.
The IOAA provides that regulations imple-
menting user fees are subject to policies
prescribed by the President; these policies
are set forth in the Office of Management
and Budget Circular A-25, 58 FR 38142
(July 15, 1993) (OMB Circular A-25).
Under OMB Circular A-25, Federal
agencies that provide services that con-
fer benefits on identifiable recipients are
to establish user fees that recover the full
cost of providing the service. An agency
that seeks to impose a user fee for gov-
ernment-provided services must calculate
the full cost of providing those services.
In general, a user fee should be set at an
amount that allows the agency to recover
the direct and indirect costs of provid-
ing the service, unless the Office of
Management and Budget (OMB) grants
an exception. OMB Circular A-25 pro-
vides that agencies are to review user fees
biennially and update them as necessary.
B. PTIN Requirement
Section 6109(a)(4) of the Internal
Revenue Code (Code) authorizes the
Secretary of the Treasury or her delegate
to prescribe regulations for the inclusion
of a tax return preparer’s identifying num-
ber on a return, statement, or other doc-
ument required to be filed with the IRS.
On September 30, 2010, the Treasury
Department and the IRS published final
regulations (TD 9501) under section 6109
in the Federal Register (75 FR 60309)
to provide that, for returns or claims for
refund filed after December 31, 2010, the
identifying number of a tax return pre-
parer is the individual’s PTIN or such
other number prescribed by the IRS in
forms, instructions, or other appropriate
guidance. Those regulations require a
tax return preparer who prepares or who
assists in preparing all or substantially all
of a tax return or claim for refund after
December 31, 2010, to have a PTIN.
C. PTIN User Fee
Final regulations (TD 9503) published
in the Federal Register (75 FR 60316) on
September 30, 2010, established a $50
user fee to apply for or renew a PTIN,
based on a 2010 Cost Model. In addition,
a $14.25 fee for a new application and a
$13 fee for an application for renewal was
payable directly to a third-party contractor.
In 2013, the IRS conducted a biennial
review of the PTIN user fee and issued a
new Cost Model that estimated an increase
of the PTIN user fee, to $54. However, the
IRS determined to keep the fee at $50 for
the next two years.
In 2015, the IRS conducted a biennial
review of the PTIN user fee and issued a
new Cost Model, which determined that
the full cost of administering the PTIN
program going forward was reduced from
$50 to $33 per application or application
for renewal, plus a $17 fee per application
or application for renewal payable directly
to a third-party contractor. Final regula-
tions (TD 9781) published in the Federal
Register (81 FR 52766) on August 10,
2016, superseded and adopted tempo-
rary regulations (TD 9742) published in
the Federal Register (80 FR 66792) on
October 30, 2015, and established the $33
annual user fee to apply for or renew a
PTIN, plus $17 per application or appli-
cation for renewal payable directly to a
third-party contractor.
In 2017, the IRS again conducted a
biennial review of the PTIN user fee and
issued a new Cost Model, which deter-
mined that the amount of the fee going
forward should be reduced to $31 per
application or application for renewal,
plus an amount payable directly to a third-
party contractor. However, on June 1,
2017, before a notice of proposed rulemak-
ing proposing to reduce the amount of the
PTIN user fee was issued, the IRS was
enjoined from charging a PTIN user fee.
Bulletin No. 2023–43 1087 October 23, 2023

In Steele v. United States, 260 F. Supp.
3d 52 (D.D.C. 2017), the United States
District Court for the District of Columbia
concluded that the Treasury Department
and the IRS lacked the statutory author-
ity to charge a PTIN user fee and enjoined
the IRS from charging a PTIN user fee.
See Steele, 2017 WL 3621747 (D.D.C.
July 10, 2017) (final judgment and perma-
nent injunction). The government filed an
appeal and on March 1, 2019, the United
States Court of Appeals for the District
of Columbia Circuit reversed the district
court’s decision and lifted the injunction
against charging the PTIN user fee. See
Montrois v. United States, 916 F.3d 1056
(D.C. Cir. 2019) (holding that a PTIN pro-
vides tax return preparers a specific benefit
by allowing them to provide an identify-
ing number that is not a social security
number on returns they prepare and stat-
ing that the permissible amount of the fee
would be the same regardless of whether
the specific benefit was instead the ability
to prepare tax returns for compensation).
The case was remanded to the United
States District Court for the District of
Columbia to determine whether the fee
amounts were excessive. Id. at 1068.
In 2019, the IRS again conducted a
biennial review of the PTIN user fee and
issued a new Cost Model, which deter-
mined that the amount of the fee going
forward should be reduced to $21 per
application or application for renewal, plus
a $14.95 fee per application or application
for renewal payable directly to a third-
party contractor. Final regulations (TD
9903) published in the Federal Register
(85 FR 43433) on July 17, 2020, adopted
the proposed regulations (REG-117138-
17) published in the Federal Register (85
FR 21126) on April 16, 2020, and estab-
lished the $21 annual user fee to apply for
or renew a PTIN, plus $14.95 per appli-
cation or application for renewal payable
directly to a third-party contractor.
In Steele v. United States, No.
1:14-cv-1523-RCL, --- F. Supp. 3d ----,
2023 WL 2139722 (Feb. 21, 2023),
the United States District Court for the
District of Columbia on remand con-
sidered whether the fee amounts were
excessive under the IOAA. Explaining
that while an agency may charge only
the reasonable cost incurred to provide a
service, or the value of the service to the
recipient, whichever is less, the district
court allowed that the activities charged
for need only be “reasonably related” to
the cost to the agency and the value to the
recipient, and the amount may include
both “direct and indirect costs” associ-
ated with the service provided. 2023 WL
2139722, at *7. The court further noted
that where an activity produces an inde-
pendent public benefit, the fee that would
otherwise be charged must be reduced by
that portion of the costs attributable to the
public benefit. Id.
The district court concluded that the
PTIN fees for fiscal years (FYs) 2011
through 2017 were excessive to the extent
they were based on: (1) the activities
already conceded by the government in the
case;
1
(2) any compliance activities other
than direct and indirect costs of investigat-
ing ghost preparers who do not list their
PTINs on returns they prepared for com-
pensation as required by law, handling
complaints regarding improper use of a
PTIN, use of a compromised PTIN, or use
of a PTIN obtained through identity theft,
and composing the data to refer to those
specific types of complaints to other IRS
business units; (3) any suitability activities;
(4) any support activities, other than those
for the provision of PTINs and mainte-
nance of the PTIN database, that facilitated
provision of an independent benefit to the
agency and the public; and (5) any activ-
ities of the third-party contractor, other
than those related to the issuance, renewal,
and maintenance of PTINs, that facilitated
provision of an independent benefit to the
agency and the public. Id. at *19.
In accordance with the biennial review
requirement in OMB Circular A-25 and
taking into account the district court’s
February 2023 memorandum opinion
in
Steele, the IRS has issued a new Cost
Model that re-determines costs that the
government continues to incur for pro-
viding PTINs and administering the PTIN
program, and re-calculates the amount
of the user fee as $11 per application or
application for renewal, plus a $8.75 fee
per application or application for renewal
payable directly to a third-party contractor.
The amount payable directly to the third-
party contractor also takes into account
certain costs that were addressed by the
district court’s February 2023 memoran-
dum opinion in Steele. Subsequently, the
IRS entered into a modified contract that
allows the government to pay those costs
rather than the individuals who apply for
or renew a PTIN.
The government is authorized to charge
a PTIN user fee under the IOAA because,
in exchange for the fee, it provides a ser-
vice by issuing and maintaining PTINs,
which provide tax return preparers a spe-
cific benefit by allowing them to provide
an identifying number that is not a social
security number on returns and claims
for refund and to prepare returns and
claims for refund for compensation. OMB
Circular A-25 states that user fees should
be collected in advance of or simultane-
ously with the provision of a service. The
PTIN user fee is collected when tax return
preparers apply for or renew their PTINs
during the application season, which
begins annually in October.
Explanation of Provisions
The IRS follows generally accepted
accounting principles (GAAP) in calcu-
lating the full cost of administering PTIN
applications and renewals. The Federal
Accounting Standards Advisory Board
(FASAB) is the body that establishes
GAAP that apply for Federal report-
ing entities, such as the IRS. FASAB
publishes the FASAB Handbook of
1
The government previously conceded $26,576,661, $26,623,420, and $25,685,247 for amounts collected in FY 2011, FY 2012, and FY 2013, respectively, which related to certain communi-
cations, compliance, Office of Professional Responsibility (OPR), and operations support activities; $8,737,123 and $9,010,458 for amounts collected in FY 2014 and FY 2015, respectively,
which related to certain communications, Office of the Director, Strategy and Finance, suitability, compliance and complaint referrals, competency and standards, continuing education, OPR,
enrolled agent and enrolled retirement plan agent department, and contractor processing activities; and $6,904,345 and $6,784,762 for amounts collected in FY 2016 and FY 2017, respec-
tively, which related to certain communications, Office of the Director, Strategy and Finance, suitability, compliance and complaint referrals, OPR, enrolled agent and enrolled retirement plan
agent department, and contractor processing activities.
October 23, 2023 1088 Bulletin No. 2023–43

Bulletin No. 2023–43 1089 October 23, 2023
Federal Accounting Standards and Other
Pronouncements, as Amended (Current
Handbook), available at https://files.fasab.
gov/pdffiles/2022_%20FASAB_%20
Handbook.pdf. The Current Handbook
includes the Statement of Federal
Financial Accounting Standards (SFFAS)
No. 4: Managerial Cost Accounting
Standards and Concepts. SFFAS No. 4
establishes internal costing standards to
accurately measure and manage the full
cost of Federal programs, and the method-
ology below is in accordance with SFFAS
No. 4.
1. Cost Estimation of Direct Labor
The IRS uses various cost-measure-
ment techniques to estimate the cost
attributable to the program. These tech-
niques include using various timekeep-
ing systems to measure the time required
to accomplish activities, or using infor-
mation provided by subject-matter
experts on the time devoted to a pro-
gram. To determine the labor and ben-
efits cost incurred to provide the service
of providing a PTIN, the IRS estimated
the number of full-time employees
required to conduct activities related to
the costs of issuing and renewing PTINs.
The number of full-time employees is
based on both current employment num-
bers and future hiring estimates. When
the indirect cost of a service or activity is
not specifically identified from the cost
accounting system, an overhead rate is
added to the identifiable direct cost to
arrive at full cost.
2. Overhead
Overhead is an indirect cost of operat-
ing an organization that is not specifically
identifiable with an activity. Overhead
includes costs of resources that are jointly
or commonly consumed by one or more
organizational unit’s activities but are not
specifically identifiable to a single activ-
ity. These costs can include:
• Financial, human resources, informa-
tion technology, and general manage-
ment and administrative.
• Rent and building.
• Procurement, other services, and
consulting.
• Property, plant, and equipment.
• Publication services.
• Research, analytical, statistical,
library and legal services.
To calculate the overhead allocable to
a service, the IRS applies an overhead rate
to the identified direct labor and benefits
and other direct costs. The overhead rate
is the ratio of the IRS’s indirect labor, ben-
efits, and non-labor costs of business divi-
sions that do not interact with taxpayers
to the labor and benefits costs of business
divisions that interact with taxpayers. The
IRS calculates an overhead rate annually.
For the FY 2023 user fee review, an over-
head rate of 62.5 percent was used.
3. Calculation of PTIN User Fee
The IRS used projections for FYs 2024
through 2026 to determine the direct and
indirect costs associated with the PTIN
program that are includible in the PTIN
user fee calculation taking into account
the district court’s February 2023 memo-
randum opinion in Steele. Direct costs are
incurred by the Return Preparer Office and
include staffing and contract-related costs
for activities, processes, and procedures
related to administering the PTIN pro-
gram. Staffing costs included in the PTIN
user fee calculation relate to the compli-
ance activities of investigating ghost pre-
parers; handling complaints regarding the
improper use of a PTIN, use of a compro-
mised PTIN, or use of a PTIN obtained
through identity theft; and composing the
data to refer those specific types of com-
plaints to other IRS business units. The
PTIN user fee also takes into account indi-
rect costs for support activities related to
the provision of PTINs and maintenance
of the PTIN database. In accordance with
Steele, the PTIN user fee calculation does
not take into account compliance costs
other than those described in this para-
graph, costs incurred by the Suitability
Department, support costs other than those
described in this paragraph, and costs pre-
viously conceded by the government in
Steele, as detailed earlier in this preamble.
The labor and benefits for the work
performed related to the PTIN program is
projected to be $16,536,827 in total over
FYs 2024 through 2026. In addition to
labor and benefits and overhead expenses,
the IRS projects incurring travel, training,
and supplies costs of $115,000 in each of
FYs 2024 through 2026. The total labor
and benefits, travel, training, and supplies,
and overhead expenses projected are
shown below:
ExpenseFY 2024FY 2025FY 2026Total
Labor and benefits$5,364,566$5,510,939$5,661,322$16,536,827
Travel, training, and supplies$115,000$115,000$115,000$345,000
Overhead (62.5 percent)$3,424,729$3,516,212$3,610,201$10,551,142
The total cost for FYs 2024 through
2026 are therefore projected to be
$27,432,969. The number of users is
based on FY 2022 numbers adjusted by a
projected increase in applications over the
next three FYs. Dividing this total cost by
the projected population of users for FYs
2024 through 2026 results in a cost per
application of $11 as shown below:
Total Costs $27,432,969
Number of Applications ÷ 2,542,665
Cost Per Application $10.79
Taking into account the full amount
of these costs, the amount of the PTIN
user fee per application or application for
renewal is $11.
Costs related to a third-party contrac-
tor’s activities for the issuance, renewal,
and maintenance of PTINs, such as

October 23, 2023 1090 Bulletin No. 2023–43
processing applications and operating
a call center, are included in the PTIN
user fee calculation, in accordance with
Steele, which will be set at $8.75 per
application or application for renewal,
in addition to the amount charged by the
government. The third-party contractor
was chosen through a competitive bid-
ding process. The amount of the third-
party contractor portion may change in
2026 when the contract expires and will
be re-computed.
Special Analyses
I. Regulatory Planning and Review
The OMB’s Office of Information and
Regulatory Analysis has determined that
these regulations are not significant and
are not subject to review under section
6(b) of Executive Order 12866.
II. Regulatory Flexibility Act
Pursuant to the Regulatory
Flexibility Act (5 U.S.C. chapter 6), it
is hereby certified that these interim
final regulations will not have a signif-
icant economic impact on a substantial
number of small entities. These regula-
tions affect all individuals who prepare
or assist in preparing all or substantially
all of a tax return or claim for refund
for compensation. Only individuals, not
businesses, can have a PTIN. Thus, the
economic impact of these regulations
on any small entity generally will be a
result of an individual tax return pre-
parer who is required to have a PTIN
owning a small business or a small busi-
ness otherwise employing an individual
tax return preparer who is required to
have a PTIN. The Treasury Department
and the IRS estimate that approximately
847,555 individuals will apply annually
for an initial or renewal PTIN. Although
these regulations will likely affect a
substantial number of small entities,
the economic impact on those entities
is not significant. These regulations
will establish an $11 fee per applica-
tion or application for renewal (plus
$8.75 payable directly to the third-party
contractor), which is a reduction from
the previously established fee and will
not have a significant economic impact
on a small entity. Accordingly, the rule
is not expected to have a significant
economic impact on a substantial num-
ber of small entities, and a regulatory
flexibility analysis is not required.
III. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates
Reform Act of 1995 (UMRA) requires
that agencies assess anticipated costs and
benefits and take certain other actions
before issuing a final rule that includes
any Federal mandate that may result in
expenditures in any one year by a State,
local, or Tribal government, in the aggre-
gate, or by the private sector, of $100 mil-
lion in 1995 dollars, updated annually for
inflation. This rule does not include any
Federal mandate that may result in expen-
ditures by State, local, or Tribal govern-
ments, or by the private sector in excess of
that threshold.
IV. Executive Order 13132: Federalism
Executive Order 13132 (Federalism)
prohibits an agency from publishing any
rule that has federalism implications if
the rule either imposes substantial, direct
compliance costs on State and local gov-
ernments, and is not required by statute,
or preempts State law, unless the agency
meets the consultation and funding
requirements of section 6 of the Executive
order. These interim final regulations do
not have federalism implications and do
not impose substantial direct compliance
costs on State and local governments or
preempt State law within the meaning of
the Executive order.
V. Good Cause
The annual PTIN application and
renewal period for the 2024 filing season
will begin shortly. It would be unneces-
sary and contrary to the public interest for
the IRS to continue to charge the current,
higher user fee pending public comment
after the IRS has determined pursuant
to the biennial review conducted under
OMB Circular A-25 that the PTIN user
fee should be reduced going forward. To
enable the reduced fee amount to be in
effect for PTINs issued or renewed by
tax return preparers preparing returns or
claims for refund in 2024, the Treasury
Department and the IRS find that there
is good cause to dispense with (1) notice
and public comment pursuant to 5 U.S.C.
553(b) and (c) and (2) a delayed effective
date pursuant to 5 U.S.C. 553(d). The
Treasury Department and the IRS will
consider public comments submitted in
response to the cross-referenced notice
of proposed rulemaking published in the
Proposed Rules section of this issue of
the Federal Register and will promul-
gate a final rule after considering those
comments
.
VI. Submission to Small Business
Administration
Pursuant to section 7805(f) of the
Code, this Treasury decision has been
submitted to the Chief Counsel for the
Office of Advocacy of the Small Business
Administration for comment on its impact
on small business.
VII. Congressional Review Act
Pursuant to the Congressional Review
Act (5 U.S.C. 801 et seq.), the Office of
Information and Regulatory Affairs des-
ignated this rule as not a major rule, as
defined by 5 U.S.C. 804(2).
Drafting Information
The principal author of these reg-
ulations is Jamie Song, Office of the
Associate Chief Counsel (Procedure and
Administration). Other personnel from
the Treasury Department and the IRS
participated in the development of the
regulations.
List of Subjects in 26 CFR Part 300
Estate taxes, Excise taxes, Fees, Gift
taxes, Income taxes, Reporting and
recordkeeping requirements.

Bulletin No. 2023–43 1091 October 23, 2023
Adoption of Amendments to the
Regulations
Accordingly, 26 CFR part 300 is
amended as follows:
PART 300—USER FEES
Paragraph 1. The authority citation for
part 300 continues to read in part as follows:
Authority: 31 U.S.C. 9701.
Par. 2. Section 300.11 is amended by
revising paragraphs (b) and (d) to read as
follows:
§300.11 Fee for obtaining a preparer
tax identification number.
* * * * *
(b) Fee. The fee to apply for or renew
a preparer tax identification number is
$11 per year and is in addition to the fee
charged by the contractor.
* * * * *
(d) Applicability date. This section
applies to applications for or renewal of a
preparer tax identification number filed on
or after October 19, 2023.
Douglas W. O’Donnell,
Deputy Commissioner for Services and
Enforcement.
Approved: September 25, 2023.
Lily Batchelder,
Assistant Secretary of the Treasury
(Tax Policy).
(Filed by the Office of the Federal Register
September 29, 2023, 4:15 p.m., and published in the
issue of the Federal Register for October 4, 2023, 88
FR 68456)

October 23, 2023 1092 Bulletin No. 2023–43
Part III
NOTE. This revenue procedure will be reproduced as the next revision of IRS Publication 1167, General Rules and Specifications for Substitute Forms and Schedules.
Rev. Proc. 2023-28
TABLE OF CONTENTS
Part 1 – INTRODUCTION TO SUBSTITUTE FORMS
Section 1.1 – Overview of Revenue Procedure 2023-28 ....................................................1093
Section 1.2 – IRS Contacts ...........................................................................1094
Section 1.3 – What’s New ............................................................................1095
Section 1.4 – Definitions .............................................................................1095
Section 1.5 – Agreement .............................................................................1097
Part 2 – GENERAL GUIDELINES FOR SUBMISSIONS AND APPROVALS
Section 2.1 – General Specifications for Approval .........................................................1098
Section 2.2 – Highlights of Permitted Changes and Requirements ............................................1100
Section 2.3 – Vouchers ..............................................................................1100
Section 2.4 – Restrictions on Changes ..................................................................1103
Section 2.5 – Guidelines for Obtaining IRS Approval ......................................................1103
Section 2.6 – Office of Management and Budget (OMB) Requirements for All Substitute Forms ....................1106
Part 3 – PHYSICAL ASPECTS AND REQUIREMENTS
Section 3.1 – General Guidelines for Substitute Forms .....................................................1107
Section 3.2 – Paper .................................................................................1109
Section 3.3 – Printing ...............................................................................1110
Section 3.4 – Margins ...............................................................................1112
Section 3.5 – Miscellaneous Information for Substitute Forms ...............................................1112
Part 4 – ADDITIONAL RESOURCES
Section 4.1 – Guidance From Other Revenue Procedures ...................................................1113
Section 4.2 – Electronic Tax Products ..................................................................1113
Part 5 – REQUIREMENTS FOR SPECIFIC TAX RETURNS
Section 5.1 – Tax Returns (Forms 1040, 1040-SR, 1120, etc.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1114
Section 5.2 – Changes Permitted to Graphics (Form 1040 or 1040-SR) ........................................1115
Part 6 – FORMAT AND CONTENT OF SUBSTITUTE RETURNS
Section 6.1 – Acceptable Formats for Substitute Forms and Schedules .........................................1117
Section 6.2 – Additional Instructions for All Forms ........................................................1118
Part 7 – MISCELLANEOUS FORMS AND PROGRAMS
Section 7.1 – Specifications for Substitute Schedules K-1 ...................................................1120
Section 7.2 – Guidelines for Substitute Forms 8655 ........................................................1125
Section 7.3 – Guidelines for Substitute Image Character Recognition (ICR) Forms ...............................1126
Part 8 – ADDITIONAL INFORMATION
Section 8.1 – Forms for Electronically Filed Returns .......................................................1127
Section 8.2 – Effect on Other Documents ................................................................1128
Section 8.3 – Exhibits ...............................................................................1128

Bulletin No. 2023–43 1093 October 23, 2023
Part 1
Introduction to Substitute Forms
Section 1.1 – Overview of Revenue Procedure 2023-28
1.1.1
Purpose
The purpose of this revenue procedure is to provide guidelines and general requirements for the
development, printing, and approval of the 2023 substitute tax forms. Approval will be based on
these guidelines. After review and approval, submitted forms will be accepted as substitutes for
official IRS forms.
1.1.2
Unique Forms
Certain unique specialized forms require the use of other publications that supplement this
publication. See Part 4.
1.1.3
Scope
The IRS accepts quality substitute tax forms that are consistent with the official forms and have no
adverse impact on processing. The IRS Substitute Forms Program (the Program) administers the
formal acceptance and processing of these forms nationwide. While this Program deals with paper
documents, it also reviews for approval other processing and filing forms used in electronic filing.
Only those substitute forms that fully comply with these requirements are acceptable. This revenue
procedure is updated as required to reflect pertinent tax year form changes and to meet processing
and/or legislative requirements.
1.1.4
Forms Covered by This
Revenue Pr
ocedure
The following types of forms are covered by this revenue procedure.
• IRS tax forms and their related schedules.
• Worksheets as they appear in the instructions.
• Applications for permission to file returns electronically and forms used as required
documentation for electronically filed returns.
• Powers of Attorney.
• Over-the-counter estimated tax payment vouchers.
• Forms and schedules relating to partnerships, exempt organizations, and employee plans.
1.1.5
Forms Not Covered by This
Revenue Pr
ocedure
The following types of forms are not covered by this revenue procedure. Refer to the publication
for questions.
• W-2 and W-3. See Pub. 1141, General Rules and Specifications for Substitute Forms W-2 and W-3.
• W-2c and W-3c. See Pub. 1223, General Rules and Specifications for Substitute Forms W-2c
and W-3c.

October 23, 2023 1094 Bulletin No. 2023–43
• 941 and attached schedules. See Pub. 4436, General Rules and Specifications for Substitute
Form 941, Schedule B (Form 941), Schedule D (Form 941), Schedule R (Form 941), and
Form 8974.
• 1096, 1097-BTC, 1098 series, 1099 series, 3921, 3922, 5498 series, W-2G, and 1042-S. See
Pub. 1179, General Rules and Specifications for Substitute Forms 1096, 1098, 1099, 5498,
and Certain Other Information Returns.
• 1095-A, 1094-B, 1095-B, 1094-C, and 1095-C. See Pub. 5223, General Rules and
Specifications for Affordable Care Act Substitute Forms 1095-A, 1094-B, 1095-B, 1094-C,
and 1095-C.
• 8027. See Pub. 1239, Specifications for Electronic Filing of Form 8027, Employer’s Annual
Information Return of Tip Income and Allocated Tips.
• Forms 1040-ES (OCR) and 1041-ES (OCR), which may not be reproduced.
• Form 5500 series (for more information on these forms, go to the Department of Labor website
at www.efast.dol.gov).
• Form 8717 bar-coded form requiring separate approval.
• Forms used internally by the IRS.
• State tax forms.
• Forms developed outside the IRS.
1.1.6
Other Information Not
Covered by
This Revenue
Procedure
The following information is not covered by this revenue procedure.
• Requests for information or documentation initiated by the IRS.
• General Instructions and Specific Instructions (these are not reviewed by the Program).
Section 1.2 – IRS Contacts
1.2.1
Where T
o Send Substitute
Forms
Send your substitute forms for approval to the following offices. Do not send forms with taxpayer
data.
FormOffice and Address
5500Check EFAST2 information at the Department of
Labor website at www.efast.dol.gov.
8717Robin.M.Joecken@irs.gov
Software developer vouchers (see
Sections 2.3.7–2.3.9)
Internal Revenue Service
Attn: Jason Lane
3211 S. Northpointe Dr.
Santa Fe Bldg. Rm 3018
Fresno, CA 93725
Jason.L.Lane@irs.gov

Bulletin No. 2023–43 1095 October 23, 2023
FormOffice and Address
ACA Forms 1094-B, 1095-B, 1094-C, and
1095-C (for more information, see Pub.
5223), and Schedule K-1 forms must be
emailed for scannability testing.
scrips@irs.gov
Schedule K-1 2-D bar-coded formsFor mailing addresses for sending Schedule K-1
2-D bar-coded forms for testing, see Section 7.1.6.
All others covered by this publication (see
Section 1.1.4)
Internal Revenue Service
Attn: Substitute Forms Program
SE:W:CAR:MP:P:TP:TP
5000 Ellin Road, Mail Stop C6-110
Lanham, MD 20706
substituteforms@irs.gov
Section 1.3 – What’s New
1.3.1
What’
s New
The following changes have been made to this year’s revenue procedure.
• .01 Editorial changes. We made editorial changes as needed and eliminated repetitive
information.
• .02 Forms 5300 and 5307 can no longer be submitted as substitute forms. Forms 5300
and 5307 must be submitted electronically through Pay.gov. For more information about
electronically submitting Forms 5300 and 5307, go to IRS.gov/Form5300 and IRS.gov/
Form5307.
• .03 Form 8905 is discontinued. Form 8905 is discontinued and can no longer be filed with
Forms 5300 and 5307.
• .04 Section 7.3 – Guidelines for Substitute Image Character Recognition Forms added.
We added suggestions that may be used as a guideline for creating easily scanned substitute
tax forms. If you choose to participate, please use the Form 1040 format provided in the new
Exhibit C and Exhibit D.
Section 1.4 – Definitions
1.4.1
Substitute Form
A tax form (or related schedule) that differs in any way from the official version and is intended to
replace the form that is printed and distributed by the IRS. This term also covers those approved
substitute forms exhibited in this revenue procedure.
1.4.2
Printed/ Preprinted Form
A form produced using
conventional printing processes or a printed form which has been
reproduced by photocopying or a similar process.

October 23, 2023 1096 Bulletin No. 2023–43
1.4.3
Preprinted Pin- Fed Form
A printed form that has marginal perforations for use with automated and high-speed printing
equipment.
1.4.4
Computer- Prepared
Substitute Form
A preprinted form in which the taxpayer’s tax entry information has been inserted by a computer,
computer printer, or other computer-type equipment.
1.4.5
Computer- Generated
Substitute Tax Return or
Form
A tax return or form that is entirely designed and printed using a computer printer on plain white
paper. This return or form must conform to the physical layout of the corresponding IRS form,
although the typeface may differ. The text should match the text on the officially printed form as
closely as possible. Condensed text and abbreviations will be considered on a case-by-case basis.
Exception. All jurats (perjury statements) must be reproduced verbatim.
1.4.6
Manually Prepared Form
A preprinted reproduced form in which the taxpayer’s tax entry information is entered by an
individual using a pen, a pencil, or other nonautomated equipment.
1.4.7
Graphics
Parts of a printed tax form that are not tax amount entries or required text. Examples of graphics
are line numbers, captions, shadings, special indicators, borders, rules, and strokes created by
typesetting, photographics, photocomposition, etc.
1.4.8
Acceptable Reproduced
Form
A legible photocopy or an exact replica of an original form.
1.4.9
Supporting Statement
(Supplemental Schedule)
A document providing detailed information to support a line entry on an official or approved
substitute form and filed with (attached to) a tax return.
Note. A supporting statement is not a tax form and does not take the place of an official form.
1.4.10
Specific Form Terms
The following specific terms are used throughout this revenue procedure in reference to all
substitute forms: format, sequence, line reference, item caption, and data entry field.
1.4.11
Format
The overall physical arrangement and general layout of a substitute form.
1.4.12
Sequence
Sequence is an integral part of the total format requirement. The substitute form should show the
same numeric and logical placement order of data as shown on the official form.

Bulletin No. 2023–43 1097 October 23, 2023
1.4.13
Line Reference
The line numbers, letters, or alphanumerics used to identify each captioned line on an official
form. These line references are printed to the immediate left of each caption and/or data entry
field.
1.4.14
Item Caption
The text on each line of a form, which identifies the data required.
1.4.15
Data Entry Field
Designated areas for the entry of data such as dollar amounts, quantities, responses, and checkboxes.
1.4.16
Advance Draft
A draft version of a new or revised form may be posted to the IRS website (IRS.gov/DraftForms)
for information purposes. Substitute forms may be submitted based on these advance drafts, but
any submitter that receives forms approval based on these early drafts is responsible for monitoring
and revising forms to reflect any revisions in the final forms provided by the IRS.
1.4.17
Approval
Generally, approval could be in writing or assumed after 20 business days from our receipt for
forms that have not been substantially changed by the IRS. This does not apply to newly created
or substantially revised IRS forms. However, the Program reserves the right to notify vendors of
any inaccuracies even after 20 business days have lapsed.
1.4.18
National Association
of Computerized Tax
Processors (NACTP)
The National Association of Computerized Tax Processors (NACTP) is a nonprofit association
that represents tax processing software and hardware developers, electronic filing processors, tax
form publishers, tax processing service bureaus, and payroll processors. The association promotes
standards in tax processing to advance efficient and effective tax filing. For more information, see
NACTP.org.
Section 1.5 – Agreement
1.5.1
Important Stipulation of
This Revenue Procedure
Any person or company who uses substitute forms and makes all or part of the changes specified
in this revenue procedure agrees to the following stipulations.
• The IRS presumes that any required changes are made in accordance with these procedures
and will not be disruptive to the processing of the tax return.
• Should any of the changes be disruptive to the IRS’s processing of the tax return, the person or
company agrees to accept the determination of the IRS as to whether the form may continue
to be filed.
• The person or company agrees to work with the IRS in correcting noted deficiencies.
Notification of deficiencies may be made by any combination of letter, email, or phone contact
and may include the request for the resubmission of unacceptable forms.

October 23, 2023 1098 Bulletin No. 2023–43
1.5.2
Response Policy and
Stipulations
The Program will email confirmation of receipt of your forms submission, if possible. Even if
you do not receive emailed confirmation of receipt, you will receive an emailed “submission
receipt,” which will provide feedback on your submission. If the Program anticipates problems
in completing the review of your submission within the 20-business-day period, the Program will
send an interim email notifying you of the extended period for review.
Once the substitute forms have been approved by the Program, you can release them after the final
versions of the forms have been issued by the IRS. Before releasing the forms, you are responsible
for updating forms approved as draft and for making form changes requested.
The policy has the following stipulations.
• This 20-business-day policy applies to electronic submissions only. It does not apply to
substitute submissions mailed to the Program.
• The policy applies to submissions of 15 (optimal) or fewer items and submissions containing
75 pages or less. Submissions of more than 15 items may require additional review time.
• If you send a large number of submissions within a short period of time, processing may be
delayed.
• Delays in processing could occur if the Program finds significant errors in your submission or
has experienced an increase in submissions. The Program will send you an interim email in
this case.
• Any anticipated problems in processing your submission within the 20-business-day period
will generate an interim email on or about the 15th business day.
• If any significant inaccuracies are discovered after the 20-business-day period, the Program
reserves the right to inform you and will require that changes be made to correct the
inaccuracies.
• The policy does not apply to substantially revised forms or to new forms created by the IRS
for which you have already made an initial submission.
Part 2
General Guidelines for Submissions and Approvals
Section 2.1 – General Specifications for Approval
2.1.1
Overview
If you produce any substitute tax forms that fully comply or follow the changes specifically
outlined by the Program, then you can generate your own substitute forms without further
approval. Also, if your substitutes have received approval in the past, and there are no substantial
formatting or text changes for the tax year, then changes can be made without additional approval.
If your changes are more extensive, you must get IRS approval before using substitute forms. More
extensive changes include different font style, decreasing or increasing the font size of caption
titles, adjusting or omitting format/layout elements, changing page orientation, and repositioning
line items, tables, and legends.

Bulletin No. 2023–43 1099 October 23, 2023
2.1.2
Email Submissions
The Program accepts submissions of substitute forms for review and approval via email. The
email address is substituteforms@irs.gov. Include the term “PDF Submissions” on the subject
line.
Follow these guidelines.
• The emailed submission should include all the forms you wish to submit in one Portable
Document Format (PDF) file. Do not email or attach each form individually.
• The emailed submission should include a maximum of 3 PDF files to include a checksheet,
a cover letter or accompanying statement, and a single PDF file that includes all of the forms
listed on your checksheet, cover letter, or accompanying statement.
• A submission should contain a maximum of 15 forms.
• An approval checksheet listing the forms you are submitting should always be included in
the PDF file along with the forms. Excluding the checksheet can slow the reviewing process
down, which can result in a delayed response to your submission. See a sample checksheet in
Exhibit B.
• Optimize PDF files before submitting.
• The maximum allowable email attachment is 2.5 megabytes.
• The Program accepts zip files.
• To alleviate delays during the peak time of September through December, submit advance
draft forms as early as possible.
If the guidelines are not followed, you may need to resubmit.
Emailing PDF submissions will not expedite review and approval. Submitting your substitute
forms package via email is the preferred and suggested method for submitting forms for review.
If, for some reason, you are not able to email your submission(s), you can mail your submission(s)
to:
Internal Revenue Service
Attn: Substitute Forms Program
SE:W:CAR:MP:P:TP:TP
5000 Ellin Road, Mail Stop C6-110
Lanham, MD 20706
2.1.3
Expediting the Process
Follow these basic guidelines for expediting the process.
• Always include a checksheet for the Program’s response.
• Include an accompanying statement identifying most, if not all, of the deviations your
substitute forms may have from the official IRS versions.
• Follow the guidance in this publication for general substitute form guidelines. Follow the
guidance in specialized publications produced by the Program for other specific forms.
• To spread out the workload, send in draft versions of substitute forms when they are posted.
Note. Be sure to make any changes to approved drafts before releasing final versions.

October 23, 2023 1100 Bulletin No. 2023–43
2.1.4
Schedules
Some schedules are considered to be an integral part of a complete tax return and must be submitted
as part of the form. Other schedules may be submitted separately and do not need to be included
with the tax form.
2.1.5
Examples of Schedules That
Must Be Submitted With
the Return
Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, is an example
of this situation. Its Schedules A through U have pages numbered as part of the basic return. For
Form 706 to be considered for approval, the entire form, including Schedules A through U, as well
as Schedule PC, must be submitted.
2.1.6
Examples of Schedules
That Can Be Submitted
Separately
Schedules C, D, and E for Form 1040 or 1040-SR are examples of schedules that can be submitted
separately. Although printed by the IRS as a supplement to Form 1040 or 1040-SR, these schedules
are not required to be submitted for approval with Form 1040 or 1040-SR. These schedules may
be separated from Form 1040 or 1040-SR and submitted as substitute forms.
2.1.7
Use and Distribution of
Unapproved Forms
The IRS is continuing a program to identify and contact tax return preparers, forms developers,
and software publishers who use or distribute unapproved forms that do not conform to this
revenue procedure. The use of unapproved forms hinders the processing of the returns.
Section 2.2 – Highlights of Permitted Changes and Requirements
2.2.1
Methods of Reproducing
IRS Forms
There are methods of reproducing IRS printed tax forms suitable for use as substitutes without
prior approval.
• You can photocopy most tax forms and use them instead of the official ones. The entire
substitute form, including entries, must be legible.
• You can reproduce any current tax form as cut sheets, snap sets, and marginally punched, pin-
fed forms as long as you use an official IRS version as the master copy.
• You can reproduce a form that requires a signature as a valid substitute form. Many tax forms
(including returns) have a taxpayer signature requirement as part of the form layout. The jurat/
perjury statement/ signature line areas must be retained and worded exactly as on the official
form. The requirement for a signature, by itself, does not prohibit a tax form from being
properly computer generated.
Section 2.3 – Vouchers
2.3.1
Overview
All payment vouchers (Forms 940-V, 941-V, 943-V, 944-V, 945-V, 1040-ES, 1040-V, 1041-V,
and 2290-V) must be reproduced in conjunction with their forms. Substitute vouchers must be
the same size as the officially printed vouchers. Vouchers that are prepared for printing on a laser
printer may include a scan line.
2.3.2
Scan Line Specifications

Bulletin No. 2023–43 1101 October 23, 2023
2.3.2
Scan Line Specifications
NNNNNNNNNAAXXXXNNNNNNNNNNNN
Item:ABCDEF
G
A.Social Security Number/Employer Identification Number/Individual Taxpayer
Identification Number/Adoption Taxpayer Identification Number (SSN/EIN/ ITIN/ATIN)
has 9 numeric (N) spaces.
B.Check Digits have 2 alpha (A) spaces.
C.Name Control has 4 alphanumeric (X) spaces.
D.
Master File Tax (MFT) Code has 2 numeric (N) spaces (see Section 2.3.3).
E.
Taxpayer Identification Number (TIN) Type has 1 numeric (N) space (see Section 2.3.4).
F.Tax Period has 6 numeric (N) spaces in year/month format (YYYYMM).
G.Transaction Code has 3 numeric (N) spaces.
2.3.3
MFT
Code
Code Number for Forms:
• 1040 (family) – 30,
• 940 – 10,
• 941 – 01,
• 943 – 11,
• 944 – 14,
• 945 – 16,
• 1041-V – 05,
• 2290 – 60, and
• 4868 – 30.
2.3.4
TIN Type
Type Number for:
• Form 1040 (family) and Form 4868 – 0; and
• Forms 940, 941, 943, 944, 945, 1041-V, and 2290 – 2.
2.3.5
Voucher Size
The voucher size
must be exactly 8.0′′ x 3.25′′ (Forms 1040-ES and 1041-ES must be 7.625′′ x
3.0′′). The document scan line must be vertically positioned 0.25 inch from the bottom of the scan
line to the bottom of the voucher. The last character on the right of the scan line must be placed
3.5 inches from the right leading edge of the document. The minimum required horizontal clear
space between characters is 0.014 inch. The line to be scanned must have a clear band 0.25 inch
in height from top to bottom of the scan line, and from border to border of the document. “Clear
band” means no printing except for dropout ink.
Some schedules are considered to be an integral part of a complete tax return and must be submitted
as part of the form. Other schedules may be submitted separately and do not need to be included
with the tax form.
Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, is an example
of this situation. Its Schedules A through U have pages numbered as part of the basic return. For
Form 706 to be considered for approval, the entire form, including Schedules A through U, as well
as Schedule PC, must be submitted.
Schedules C, D, and E for Form 1040 or 1040-SR are examples of schedules that can be submitted
separately. Although printed by the IRS as a supplement to Form 1040 or 1040-SR, these schedules
are not required to be submitted for approval with Form 1040 or 1040-SR. These schedules may
be separated from Form 1040 or 1040-SR and submitted as substitute forms.
The IRS is continuing a program to identify and contact tax return preparers, forms developers,
and software publishers who use or distribute unapproved forms that do not conform to this
revenue procedure. The use of unapproved forms hinders the processing of the returns.
Section 2.2 – Highlights of Permitted Changes and Requirements
There are methods of reproducing IRS printed tax forms suitable for use as substitutes without
prior approval.
• You can photocopy most tax forms and use them instead of the official ones. The entire
substitute form, including entries, must be legible.
• You can reproduce any current tax form as cut sheets, snap sets, and marginally punched, pin-
fed forms as long as you use an official IRS version as the master copy.
• You can reproduce a form that requires a signature as a valid substitute form. Many tax forms
(including returns) have a taxpayer signature requirement as part of the form layout. The jurat/
perjury statement/ signature line areas must be retained and worded exactly as on the official
form. The requirement for a signature, by itself, does not prohibit a tax form from being
properly computer generated.
Section 2.3 – Vouchers
All payment vouchers (Forms 940-V, 941-V, 943-V, 944-V, 945-V, 1040-ES, 1040-V, 1041-V,
and 2290-V) must be reproduced in conjunction with their forms. Substitute vouchers must be
the same size as the officially printed vouchers. Vouchers that are prepared for printing on a laser
printer may include a scan line.
2.1.4
Schedules
2.1.5
Examples of Schedules That
Must Be Submitted With
the Return
2.1.6
Examples of Schedules
That Can Be Submitted
Separately
2.1.7
Use and Distribution of
Unapproved Forms
2.2.1
Methods of Repr
oducing
IRS Forms
2.3.1
Overview

October 23, 2023 1102 Bulletin No. 2023–43
2.3.6
Print and Paper Weight
Vouchers must be imaged in black ink using OCR A, OCR B, or Courier 10. These fonts may not
be mixed in the scan line. The horizontal character pitch is 10 CPI. The preferred paper weight is
20 to 24 pound OCR bond.
2.3.7
Specifications for Software
Developers
Certain vouchers may be reproduced for use in the IRS lockbox system. These include the 1040-
V, 1040-ES, 1041-V, the 94X family, and 2290 vouchers. Software developers must follow these
specific guidelines to produce scannable vouchers strictly for lockbox purposes. Also see Exhibit A.
• The total depth must be 3.25 inches.
• The scan line must be 0.5 inch from the bottom edge and 1.75 inches from the left edge of the
voucher and left justified.
• Software developers’ vouchers must be 8.5 inches wide (instead of 8 inches with a cut line).
Therefore, no vertical cut line is required.
• Scan line positioning must be exact.
• Do not use the over-the-counter format voucher and add the scan line to it.
• All scanned data must be in 12-point OCR A font.
• The 4-digit NACTP ID code or IRS source code should be placed under the payment indicator arrow.
• Windowed envelopes must not display the scan line in order to avoid disclosure and privacy issues.
Note. All software developers must ensure that their software uses OCR A font so taxpayers will
be able to print the vouchers in the correct font.
2.3.8
Specific Line Positions
Follow these line specifications for entering taxpayer data in the lockbox vouchers.
Start RowStart ColumnWidthEnd Column
Line Specifications for Taxpayer Data:
Taxpayer Name5663641
Taxpayer Address, Apt.5763641
Taxpayer City, State, ZIP5863641
Foreign Country Name5963641
Foreign Province/County6061722
Foreign Postal Code60261641
Line Specifications for Mail To Data:
Mail Name56433880
Mail Address57433880
Mail City, State, ZIP58433880
Line Specifications for:
Scan Line6326n/an/a

Bulletin No. 2023–43 1103 October 23, 2023
2.3.9
How To Get Approval
Send an approval sheet with each form type for IRS signature to Jason Lane at Jason.L.Lane@irs.
gov. You should include in the email an example of each type of voucher the site will be testing.
Note. Do not mail any test vouchers to Jason Lane.
You are required to send 25 voucher samples of each form in PDF format by December 8, 2023.
You should email the test vouchers to raul.t.mariduena@jpmorgan.com. You can also print the
vouchers and send them to his mailing address at:
JP Morgan Chase
Attn: Raul Mariduena
830 Tyvola Road, Suite 114
Charlotte, NC 28217
For further information, contact Jason Lane at Jason.L.Lane@irs.gov, or at 559-550-8740 (not
toll free).
Section 2.4 – Restrictions on Changes
2.4.1
What You Cannot Do
to Forms Suitable for
Substitute Tax Forms
You cannot, without prior IRS approval, change any IRS tax form or use your own (nonapproved)
versions including graphics, unless specifically permitted by this revenue procedure. See Sections
2.5.7 through 2.5.11.
You cannot adjust any of the graphics on Form 1040 or 1040-SR (except in those areas specified
in Part 5 of this revenue procedure) without prior approval from the Program.
You cannot rearrange or redistribute data entry fields, and/or allow data entry fields to flow from
one page onto the next (that is, each page of a substitute form must contain the exact number of
data entry fields as there are on the official IRS form). The order of information on the substitute
form must be identical to the IRS version of the form. Publications for specific substitute forms
will state allowances for those respective forms.
Note. The 20-business-day turnaround policy may not apply to extensive changes.
Section 2.5 – Guidelines for Obtaining IRS Approval
2.5.1
Basic Requirements
Preparers who submit substitute privately designed, privately printed, computer-generated, or
computer-prepared tax forms must develop these substitutes using the guidelines established in
this part. These forms, unless there is an exception outlined by this revenue procedure, must be
approved by the IRS before being filed.
2.5.2
Conditional Approval
Based on Advance Drafts
The IRS cannot grant final approval of your substitute form until the official form has been
published. However, the IRS posts advance draft forms on its website at IRS.gov/DraftForms.
Submission of proposed substitutes of these advance draft forms is encouraged, and conditional
approval will be granted based solely on these early drafts. These advance drafts are subject to
significant change before forms are finalized. If these advance drafts are used as the basis for your

October 23, 2023 1104 Bulletin No. 2023–43
substitute forms, you will be responsible for subsequently updating your final forms to agree with
the final official version. These revisions need not be resubmitted for further approval.
Note. Approval of forms based on advance drafts will not be granted after the final version of an
official form is published.
2.5.3
Submission Procedures
Follow these general guidelines when submitting substitute forms for approval.
• Any alteration of forms must be within the limits acceptable to the IRS. It is possible that,
from one filing period to another, a change in law or a change in internal need (processing,
audit, compliance, etc.) may change the allowable limits for the alteration of the official form.
• When approval of any substitute form (other than those exceptions specified in Part 1, Section
1.2) is requested, a sample of the proposed substitute form should be emailed for consideration
to the Program at the address shown in Section 1.2.1.
• Schedules and forms (for example, Forms 3468, 4136, etc.) that can be used with more than
one type of return (for example, Forms 1040, 1040-SR, 1041, 1120, etc.) should be submitted
only once for approval, without regard to the number of different tax returns with which they
may be associated. Also, all pages of multi-page forms or returns should be submitted in the
same package.
2.5.4
Approving Offices
Because only
the Program is authorized to approve substitute forms, unnecessary delays may
occur if forms are sent to the wrong office. You may receive an interim letter about the delay.
The Program may then coordinate the response with the originator responsible for revising that
particular form. Such coordination may include allowing the originator to officially approve the
form. No IRS office is authorized to allow deviations from this revenue procedure.
2.5.5
IRS Review of Software
Programs, etc.
The IRS does not review or approve the logic of specific software programs, nor does the IRS
confirm the calculations on the forms produced by these programs. The accuracy of the program
remains the responsibility of the software package developer, distributor, or user.
The Program is primarily concerned with the pre-filing quality review of the final forms that are
expected to be processed by IRS field offices. For this purpose, you should submit forms without
including any taxpayer information such as names, addresses, monetary amounts, etc.
If the software used is programmed to produce copies with populated fields, then you must use
dummy information. This will allow the Program to review and provide feedback or approval.
Vendors should use “0” for all number values and “X” for any information that requires alpha
characters.
2.5.6
When To Send Proposed
Substitutes
Proposed substitutes, which are required to be submitted per this revenue procedure, should be
sent as much in advance of the filing period as possible. This is to allow adequate time for analysis
and response.
2.5.7
Accompanying Statement
When submitting sample substitutes, you should include an accompanying statement that lists
each form number and its changes from the official form (position, arrangement, appearance, line

Bulletin No. 2023–43 1105 October 23, 2023
numbers, additions, deletions, etc.). With each of the items, you should include a detailed reason
for the change.
When requesting approval, include a checksheet. Checksheets expedite the approval process. The
checksheet may look like the example in Exhibit B displayed in the back of this procedure or may
be one of your own design. Include your email address on the checksheet.
2.5.8
Approval/ Nonapproval
Notice
The Program will email the checksheet or an approval letter to the originator, unless:
• The requester has asked for a formal letter, or
• Significant corrections to the submitted forms are required.
Notice of approval may impose qualifications before using the substitutes. Notices of unapproved
forms may specify the changes required for approval and require resubmission of the form(s) in
question. When appropriate, you will be contacted by telephone.
2.5.9
Duration of Approval
Most
signature tax returns and many of their schedules and related forms have the tax year printed
in the upper right corner. Approvals for these annual forms are usually good for 1 calendar year
(January through December of the year of filing). Quarterly tax forms in the 94X series and Form
720 require approval for any quarter in which the form has been revised.
Because changes are usually made to an annual form every year, each new filing season generally
requires a new submission of a substitute form. Very rarely is updating the preprinted year the
only change made to an annual form. However, if no significant content, formatting, or layout
changes were made to a tax form, then review and approval received for the prior tax year can be
carried over into the current tax year.
2.5.10
Limited Continued Use of
an Approved Change
Limited changes approved for one tax year may be allowed for the same form in the following
tax year. Examples are the use of abbreviated words, revised form spacing, compressed text lines,
shortened captions, etc., which do not change the integrity of lines or text on the official forms.
If the vendor or filer makes substantial changes to the form, new substitutes must be submitted
for approval. If the vendor or filer makes only minor editorial changes to the form, or makes any
changes that mirror changes the IRS makes to the form’s official version, the new substitute does
not need to be submitted for approval. It is the responsibility of each vendor who has been granted
permission to produce substitute forms to monitor and revise forms to mirror any revisions to the
official forms made by the IRS. If there are any questions, contact the Program.
2.5.11
When Approval Is Not
Required
If you received approval for a specific change on a form last year, you may make the same change
this year if the item is still present on the official form.
• The new substitute form does not have to be submitted to the IRS and approval based on that
change is not required.
• However, the new substitute form must conform to the official current year IRS form in
other respects, such as date, Office of Management and Budget (OMB) approval number,
attachment sequence number, Paperwork Reduction Act Notice statement, arrangement, item
caption, line number, line reference, data sequence, etc.

October 23, 2023 1106 Bulletin No. 2023–43
• The new substitute form must also comply with changes to the guidelines in this revenue
procedure. This procedure may have eliminated, added to, or otherwise changed the
guideline(s) that affected the change approved in the prior year.
• An approved change is authorized only for the period from a prior tax year substitute form to
a current tax year substitute form.
Exception. Forms with temporary, limited, or interim approvals (or with approvals that state a
change is not allowed in any other tax year) are subject to review in subsequent years.
2.5.12
Required Copies
Generally, you
must send us one copy of each form being submitted for approval. However, if
you are producing forms for different computer platforms (for example, Microsoft vs. Apple),
different tax preparation software (for example, TurboTax® vs. TaxSlayer®), or different types
of printers (for example, inkjet vs. impact), and these forms differ significantly in appearance,
submit one copy for each type of platform, tax preparation software, or printer.
2.5.13
Requestor’s Responsibility
Following receipt of an initial approval for a substitute forms package or a software output
program to print substitute forms, it is the responsibility of the originator (designer or distributor)
to provide client firms or individuals with forms that meet the IRS’s requirements for continuing
acceptability. Examples of this responsibility include:
• Using the prescribed print paper, font size, legibility, state tax data deletion, etc.; and
• Informing all users of substitute forms of the legal requirements of the Paperwork Reduction
Act Notice, which is generally found in the instructions for the official IRS forms.
2.5.14
Source Code
The Program
will assign a unique source code to each firm that submits substitute forms for
approval. This source code will be a permanent identifier that must be used on every submission
by a particular firm.
The source code consists of three alpha characters and should generally be printed under or to the
left of the “Paperwork Reduction Act” statement. Vendors must ensure that the source code is not
printed too close to or within the left or bottom 0.5 inch margin to avoid the source code from
being cut off during printing.
Section 2.6 – Office of Management and Budget (OMB) Requirements for All Substitute Forms
2.6.1
OMB Requirements for All
Substitute Forms
There are legal requirements of the Paperwork Reduction Act of 1995 (the Act). Public Law 104-
13 requires the following.
• OMB approves all IRS tax forms that are subject to the Act.
• Each IRS form contains (in the upper right corner) the OMB number, if assigned.
• Each IRS form (or its instructions) states why the IRS needs the information, how it will be
used, and whether or not the information is required to be furnished to the IRS.

Bulletin No. 2023–43 1107 October 23, 2023
This information must be provided to every user of official or substitute IRS forms or instructions.
2.6.2
Application of the
Paperwork Reduction Act
On forms that have been assigned OMB numbers:
• All substitute forms must contain in the upper right corner the OMB number that is on the
official form, and
• The required format is: OMB No. 1545-XXXX (preferred) or OMB # 1545-XXXX
(acceptable).
2.6.3
Required Explanation to
Users
You must inform
the users of your substitute forms of the IRS use and collection requirements
stated in the instructions for official IRS forms.
• If you provide your users or customers with the official IRS instructions, each form must
retain either the Paperwork Reduction Act Notice (or Disclosure, Privacy Act, and Paperwork
Reduction Act Notice), or a reference to it as the IRS does on the official forms (usually in the
lower left corner of the forms).
• This notice reads, in part, “We ask for tax return information to carry out the tax laws of the
United States. . . .”
Note. If no IRS instructions are provided to users of your forms, the exact text of the Paperwork
Reduction Act Notice (or Disclosure, Privacy Act, and Paperwork Reduction Act Notice) must be
furnished separately or on the form.
2.6.4
Finding the OMB Number
and Paperwork Reduction
Act Notice
The OMB number
and the Paperwork Reduction Act Notice, or references to it, may be found
printed on an official form (or its instructions). The number and the notice are included on the
official paper format and in other formats produced by the IRS.
Part 3
Physical Aspects and Requirements
Section 3.1 – General Guidelines for Substitute Forms
3.1.1
General Information
The official form is the standard. Because a substitute form is a variation from the official form,
you should know the requirements of the official form for the year of use before you modify it to
meet your needs. To obtain the most frequently used tax forms, go to IRS.gov/Forms.
3.1.2
Design
Each form must follow the design of the official form as to format arrangement, item caption, line
numbers, line references, and sequence.

October 23, 2023 1108 Bulletin No. 2023–43
3.1.3
State Tax Information
Prohibited
Generally, state tax information must not appear on the federal tax return, associated form, or
schedule that is filed with the IRS. Exceptions occur when amounts are claimed on, or required
by, the federal return (for example, state and local income taxes on Schedule A (Form 1040)).
3.1.4
Vertical Alignment of
Amount Fields
IF a form is to be...THEN...
manually prepared and the official
IRS form still has a separate cents
entry field
1.the entry column must have a vertical line or some
type of indicator in the amount field to separate
dollars from cents, and
2. the cents column must be at least 0.3 inch wide.
computer generated1. vertically align the amount entry fields where
possible, and
2. use one of the following amount formats.
a) 0,000,000.
b) 0,000,000.00.
computer prepared1. you may remove the vertical line in the amount field
that separates dollars from cents, and
2. use one of the following amount formats.
a) 0,000,000.
b) 0,000,000.00.
3.1.5
Attachment Sequence
Number
Many individual income tax forms have a required “attachment sequence number” located just
below the year designation in the upper right corner of the form. The IRS uses this number to
indicate the order in which forms are to be attached to the tax return for processing. Some of the
attachment sequence numbers may change from year to year.
The following apply to computer-prepared forms.
• The sequence number may be printed in no less than 12-point boldface type and centered
below the form’s year designation.
• The sequence number may also be placed following the year designation for the tax form and
separated with an asterisk.
• The actual number may be printed without labeling it the “Attachment Sequence Number.”
3.1.6
Assembly of Forms
When developing software or forms for use by others, inform your customers/clients that the
order in which the forms are arranged may affect the processing of the package. A return must be
arranged in the order indicated below.
IF the form is...THEN the sequence is...
1040 or 1040-SR
• Form 1040 or 1040-SR, and schedules and forms in attachment
sequence number order.
any other tax return
(Form 1120, 1120-S,
1065, 1041,
etc.)
• the tax returns, directly associated schedules (Schedule D, etc.),
directly associated forms, additional schedules in alphabetical
order, and additional forms in numerical order.

Bulletin No. 2023–43 1109 October 23, 2023
Supporting statements should then follow in the same sequence as the forms they support.
Additional information required should be attached last.
In this way, the forms are received in the order in which they must be processed. If you do not send
returns to the IRS in order, processing may be delayed.
3.1.7
Paid Preparer
’s
Information and Signature
Area
On Forms 1040, 1040-SR, and 1120, and any other applicable tax forms, the “Paid Preparer Use
Only” area may not be rearranged or relocated. You may, however, add three extra lines to the
paid preparer’s address area, and remove the horizontal rules in that area without prior approval.
3.1.8
Some Common Reasons
for Requiring Changes to
Substitute Forms
Some reasons that substitute form submissions may require changes include the following.
• Shading areas incorrectly.
• Failing to include a reference to the location of the Paperwork Reduction Act Notice.
• Not including parentheses for losses.
• Not including “Attach Statement” when appropriate.
• Including line references or entry spaces that do not match the official form.
• Printing text that is different from the official form.
• Altering the jurat (perjury statement).
• Having an incorrect OMB number.
• Including the IRS catalog number (Cat. No.) on the form.
• Failing to include preprinted amounts in entry fields.
• Missing IRS source code or NACTP software ID.
• Missing 3-letter FFF code on paper Form 1040 from tax software companies that participate
in the IRS Free File Program.
• Incorrect dimensions.
Section 3.2 – Paper
3.2.1
Paper Content
The paper must be:
• Chemical wood writing paper that is equal to or better than the quality used for the official
form,
• At least 18 pound (17′′ x 22′′, 500 sheets), or
• At least 50 pound offset book (25′′ x 38′′, 500 sheets).

October 23, 2023 1110 Bulletin No. 2023–43
3.2.2
Paper With Chemical
Transfer Properties
There are several kinds of paper prohibited for substitute forms. These are:
1. Carbon-bonded paper, and
2. Chemical transfer paper except when the following specifications are met.
a. Each ply within the chemical transfer set of forms must be labeled.
b. Only the top ply (ply one and white in color), the one that contains chemical on the back
only (coated back), may be filed with the IRS.
Example. A set containing three plies would be constructed as follows: ply one (coated back),
“Federal Return, File with IRS”; ply two (coated front and back), “Taxpayer’s copy”; and ply
three (coated front), “Preparer’s copy.”
The file designation, “Federal Return, File with IRS” for ply one, must be printed in the bottom
right margin (just below the last line of the form) in 12-point boldface type.
It is not mandatory, but recommended, that the file designation “Federal Return, File with IRS” be
printed in a contrasting ink for visual emphasis.
3.2.3
Paper and Ink Color
It is
preferred that the color and opacity of paper substantially duplicate that of the original form.
This means that your substitute must be printed in black ink and may be on white paper or on the
colored paper the IRS form is printed on. Form 1040 or 1040-SR substitute reproductions may be
in black ink without the colored shading. The only exception to this rule is Form 1041-ES, which
should be printed with a PMS 100 yellow shading in the color-screened area. This is necessary to
assist us in expeditiously separating this form from the very similar Form 1040-ES.
3.2.4
Page Size
Substitute or reproduced forms and computer-prepared/-generated substitutes may be the same
size as the official form or they may be the standard commercial size (8.5′′ x 11′′). The thickness
of the stock cannot be less than 0.003 inch.
Section 3.3 – Printing
3.3.1
Printing Medium
The private printing of all substitute tax forms must be by conventional printing processes,
photocopying, computer graphics, or similar reproduction processes.
3.3.2
Legibility
All forms must have a high standard of legibility as to printing, reproduction, and fill-in matter.
Entries of taxpayer data may be no smaller than 8 points. The IRS reserves the right to reject those
with poor legibility. The ink and printing method used must ensure that no part of a form (including
text, graphics, data entries, etc.) develops “smears” or similar quality deterioration. This standard
must be followed for any subsequent copies or reproductions made from an approved master
substitute form, either during preparation or during IRS processing.

Bulletin No. 2023–43 1111 October 23, 2023
3.3.3
Type Font
Many federal tax forms are printed using Helvetica as the basic type font. It is preferred that you
use this type font when composing substitute forms.
3.3.4
Print Spacing
Substitute forms should be printed using a 6 lines/inch vertical print option. They should also be
printed horizontally in 10-pitch pica (that is, 10 print characters per inch) or 12-pitch elite (that is,
12 print positions per inch).
3.3.5
Image Size
The image size of a printed substitute form should be as close as possible to that of the official
form. You may omit any text on both computer-prepared and computer-generated forms that is
solely instructional.
3.3.6
Title Area Changes
To allow a large top margin for marginal printing and more lines per page, the title line(s) for all
substitute forms (not including the form’s year designation and sequence number, when present)
may be photographically reduced by 40% or reset as one line of type. When reset as one line, the
type size may be no smaller than 14 points. You may omit “Department of the Treasury—Internal
Revenue Service” and all references to instructions in the form’s title area.
3.3.7
Remove Government
Publishing Office Symbol
and IRS Catalog Number
When privately printing substitute tax forms, the Government Publishing Office (GPO) symbol
and/or jacket number must be removed. In the same place using the same type size, print the EIN
of the printer or designer, or the IRS-assigned source code. (Preferably, this last number should be
printed in the lower left area of the first page of each form.) Also, remove the IRS catalog number
(Cat. No.) and the recycle symbol if the substitute is not produced on recycled paper.
3.3.8
Printing Single- Page
Forms
Substitute single-page forms should be reproduced the same as IRS single-page forms. Other
forms or schedules should not be printed on the back or on blank portions of a single-page form.
However, printing instructions on the back or on blank portions of a single-page form is acceptable.
3.3.9
Photocopy Equipment
The IRS does not undertake to approve or disapprove the specific equipment or process used in
reproducing official forms. Photocopies of forms must be entirely legible and satisfy the conditions
stated in this and other revenue procedures.
3.3.10
Reproductions
Reproductions of official forms and substitute forms that do not meet the requirements of this
revenue procedure may not be filed instead of the official forms. Illegible photocopies are subject
to being returned to the filer for resubmission of legible copies.
3.3.11
Removal of Instructions
Generally, you may remove references to instructions. No prior approval is needed. However, in
some instances, you may be requested to include references to instructions.
Exception. The words “For Paperwork Reduction Act Notice, see instructions” must be retained,
or a similar statement indicating the location of the Notice must be provided on each form.

October 23, 2023 1112 Bulletin No. 2023–43
Section 3.4 – Margins
3.4.1
Margin Size
The format of a reproduced tax form when printed on the page must have margins on all sides at
least as large as the margins on the official form. This allows room for IRS employees to make
necessary entries on the form during processing.
• A 0.5 inch to 0.25 inch margin must be maintained across the top, bottom, and both sides of
all substitute forms.
• The marginal, perforated strips containing pin-fed holes must be removed from all forms prior
to filing with the IRS.
3.4.2
Marginal Printing
Prior approval is not required for the marginal printing allowed when printed on an official form
or on a photocopy of an official form.
• With the exception of the actual tax return forms (for example, Forms 1040, 1040-SR, 1120,
940, 941, etc.), you may print in the left vertical margin and in the left half of the bottom
margin.
• Printing is never allowed in the top right margin of the tax return form (for example, Forms
1040, 1040-SR, 1120, 940, 941, etc.). The IRS uses this area to imprint a Document Locator
Number for each return. There are no exceptions to this requirement.
Section 3.5 – Miscellaneous Information for Substitute Forms
3.5.1
Filing Substitute Forms
To be acceptable for filing, a substitute form must print out in a format that will allow the filer to
follow the same instructions that accompany official forms. The form must be legible, must be on
the appropriately sized paper, and must include a jurat (perjury statement) where one appears on
the published form.
3.5.2
Caution to Software
Publishers
The IRS has received ret
urns produced by software packages with approved output where either
the form heading was altered or the lines were spaced irregularly. This produces an illegible or
unrecognizable return or a return with the wrong number of pages. While many of these problems
are caused by individual printer differences, they may delay input of return data and, in some
cases, generate correspondence to the taxpayer. Therefore, in the instructions to the purchasers
of your product, both individual and professional, stress that their returns will be processed more
efficiently if they are properly formatted. This includes:
• Having the correct form numbers, six-digit form identifying numbers, and titles at the top of
the return; and
• Submitting the same number of pages as if the form were an official IRS form with the line
items on the proper pages.

Bulletin No. 2023–43 1113 October 23, 2023
3.5.3
Caution to Producers of
Software Packages
If you are producing a software package that generates name and address data onto the tax return,
do not, under any circumstances, program either the IRS preprinted check digits or a practitioner-
derived name control to appear on any return prepared and filed with the IRS.
3.5.4
Programming to Print
Forms
Whenever applicable:
• Use only the following label information format for single filers: JOHN Q. DOE 000 OAK
DRIVE HOMETOWN, STATE 00000;
• Use only the following label information format for joint filers: JOHN Q. DOE MARY Q.
DOE 000 OAK DRIVE HOMETOWN, STATE 00000; and
• Use “0” for number values and “X” for alpha characters entered in data entry fields as dummy
copy.
Part 4
Additional Resources
Section 4.1 – Guidance From Other Revenue Procedures
4.1.1
General
The IRS publications listed below provide guidance for substitute tax forms not covered in this
revenue procedure. These publications are available on the IRS website. Use the publication
number listed below to search for the requested document.
• Pub. 1141, General Rules and Specifications for Substitute Forms W-2 and W-3.
• Pub. 1179, General Rules and Specifications for Substitute Forms 1096, 1098, 1099, 5498,
and Certain Other Information Returns.
• Pub. 1223, General Rules and Specifications for Substitute Forms W-2c and W-3c.
• Pub. 4436, General Rules and Specifications for Substitute Form 941, Schedule B (Form 941),
Schedule D (Form 941), Schedule R (Form 941), and Form 8974.
• Pub. 5223, General Rules and Specifications for Affordable Care Act Substitute Forms 1095-
A, 1094-B, 1095-B, 1094-C, and 1095-C.
Section 4.2 – Electronic Tax Products
4.2.1
The IRS Website
Copies
of tax forms and their instructions, publications, fillable forms, and prior year forms and
publications may be found on the IRS website at IRS.gov/Forms.
Draft forms and instructions may be found at IRS.gov/DraftForms.
Other tax-related information may be found at IRS.gov.

October 23, 2023 1114 Bulletin No. 2023–43
4.2.2
System Requirements
and Ordering Forms and
Instructions
For system requirements, contact the National Technical Information Service (NTIS) at NTIS.
gov. Prices are subject to change.
You can order IRS forms and other tax material at IRS.gov/OrderForms.
Part 5
Requirements for Specific Tax Returns
Section 5.1 – Tax Returns (Forms 1040, 1040-SR, 1120, etc.)
5.1.1
Acceptable Forms
Tax return forms (such as Forms 1040, 1040-SR, and 1120) require a signature and establish tax
liability. Computer-generated versions are acceptable under the following conditions.
• These substitute forms must be printed on plain white paper.
• Substitute forms must conform to the physical layout of the corresponding IRS form although
the typeface may differ. The text should match the text on the officially published form as
closely as possible. Condensed text and abbreviations will be considered on a case-by-case
basis. Caution. All jurats (perjury statements) must be reproduced verbatim. No text can be
added, deleted, or changed in meaning.
• Various computer graphic print media such as laser printing, inkjet printing, etc., may be used
to produce the substitute forms.
• The substitute form must be the same number of pages and contain the same text on the lines
as the official form.
• All substitute forms must be submitted for approval prior to their original use. You do not
need approval for a substitute form if its only change is the preprinted year and you had
received a prior year approval letter. Exception. If the approval letter specifies a one-time
exception for your form, the next year’s form must be approved.
5.1.2
Prohibited Forms
The following are prohibited.
• Computer-generated tax forms (for example, Form 1040, 1040-SR, etc.) on lined or color-
barred paper.
• Tax forms that differ from the official IRS forms in a manner that makes them nonstandard or
unable to process.
5.1.3
Changes Permitted to Form
1040
Certain changes (listed in Section 5.2) are permitted to the graphics of the form without prior
approval, but these changes apply to only acceptable preprinted forms. Changes not requiring
prior approval are good only for the annual filing period, which is the current tax year. Such
changes are valid in subsequent years only if the official form does not change.
5.1.4
Other Changes Not Listed
All changes not listed in Section 5.2 require approval from the IRS before the form can be filed.

Bulletin No. 2023–43 1115 October 23, 2023
Section 5.2 – Changes Permitted to Graphics (Form 1040 or 1040-SR)
5.2.1
Adjustments
You may make minor vertical and horizontal spacing adjustments to allow for computer or
word processing printing. This includes widening the amount columns or tax entry areas if the
adjustments comply with other provisions stated in revenue procedures. No prior approval is
needed for these changes.
Schedules 1–3 cannot be combined for filing purposes. For the client copy of the return, the
numbered schedules may be printed two to a page (for example, Schedule 3 below Schedule 2, if
both are completed as part of the return). If numbered schedules are combined on the client copy,
it must include a statement that it is “Not for Filing.”
5.2.2
Name and Address Ar
ea
The horizontal rules and instructions within the name and address area may be removed and the
entire area left blank. No line or instruction can remain in the area. The heavy-ruled border (when
present) that outlines the name, address area, and SSN must not be removed, relocated, expanded,
or contracted.
5.2.3
Required Format
When the name and address area is left blank, the following format must be used when printing
the taxpayer’s name and address.
• 1st name line (35 characters maximum).
• 2nd name line (35 characters maximum).
• In-care-of name line (35 characters maximum).
• City, state (25 characters maximum), one blank character, and ZIP code.
5.2.4
Conventional Name and
Address Data
When there
is no in-care-of name line, the name and address will consist of only three lines (single
filer) or four lines (joint filer).
Example of joint filer. Name and address (joint filer) with no in-care-of name line:
JOHN Q. DOE
MARY Q. DOE
000 ANYWHERE ST., APT. 000
ANYTOWN, STATE 00000
Example of in-care-of name line. Name and address (single filer) with in-care-of name line:
JOHN Q. DOE
C/O JOHN R. DOE
0000 SOMEWHERE AVE.
SAMETOWN, STATE 00000

October 23, 2023 1116 Bulletin No. 2023–43
5.2.5
SSN and EIN Area
The broken vertical lines separating the format arrangement of the SSN/EIN may be removed.
When the vertical lines are removed, the SSN and EIN formats must be 000-00-0000 or
00-0000000, respectively.
5.2.6
Entering Cents
• You may remove the vertical rule that separates the dollars from the cents if it is still included
on the official IRS form.
• All entries in the amount column should have a decimal point following the whole dollar
amounts whether or not the vertical line that separates the dollars from the cents is present.
• You may omit printing the cents, but all amounts entered on the form must follow a consistent
format. You are strongly urged to round off the figures to whole dollar amounts, following the
official form instructions.
• When several amounts are added together, the total should be rounded off after addition (that
is, individual amounts should not be rounded off for computation purposes).
• When printing money amounts, you must use one of the following formats: (a) 0,000,000; or
(b) 0,000,000.00.
• When there is no entry for a line, leave the line blank.
5.2.7
Changes to Lines
No prior approval is needed for the following changes (for use with computer-prepared forms
only). Specific line numbers in the following headings may have changed due to tax law changes.
5.2.8
Dependents on Form 1040
The vertical lines separating columns (1) through (4) may be removed. The captions may be
shortened to allow a one-line caption for each column.
5.2.9
Other Lines
Any
other line with text that takes up two or more vertical lines may be compressed to one line by
using contractions, etc., and by removing instructional references.
5.2.10
Form 1040 – Tax
You may change the line caption to read “Tax” and computer print the words “Total includes tax
from” and either “Form(s) 8814” or “Form 4972” or “962 election.” If both forms are used, print
both form numbers. This specific line number may have changed.
5.2.11
Color Screening
It is not necessary to duplicate the color screening used on the official form. A substitute Form
1040 or 1040-SR may be printed in black and white only with no color screening.
5.2.12
Other Changes Prohibited
No other changes to the Form 1040 or 1040-SR graphics are permitted without prior approval
except for the removal of instructions and references to instructions.

Bulletin No. 2023–43 1117 October 23, 2023
Part 6
Format and Content of Substitute Returns
Section 6.1 – Acceptable Formats for Substitute Forms and Schedules
6.1.1
Exhibits and Use of
Acceptable Formats
Exhibit A is an acceptable format for Form 1040-ES.
• If your computer-generated Form 1040-ES appears exactly like Exhibit A, no prior authorization
is needed.
• You may computer-generate forms not shown here, but you must design them by following
the manner and style discussed in Part 3.
• Take care to observe the other requirements and conditions in this revenue procedure. The
IRS encourages the submission of all proposed forms covered by this revenue procedure.
6.1.2
Instructions
The format of each substitute form or schedule must follow the format of the official form or
schedule as to item captions, line references, line numbers, sequence, form arrangement and format,
etc. Basically, try to make the form look like the official one, with readability and consistency
being primary factors. You may use periods and/or other similar special characters to separate the
various parts and sections of the form. Do not use alpha or numeric characters for these purposes.
All line numbers and items must be printed even though an amount is not entered on the line.
6.1.3
Line Numbers
When a line on an official form is designated by a number or a letter, that designation (reference
code) must be used on a substitute form. The reference code must be printed to the left of the text
of each line and immediately preceding the data entry field, even if no reference code precedes
the data entry field on the official form. If an entry field contains multiple lines and shows the line
references once on the left and right side of the form, use the same number of line references on
the substitute form.
In addition, the reference code that is immediately before the data field must either be followed
by a period or enclosed in parentheses. There must also be at least two blank spaces between the
period or the right parenthesis and the first digit of the data field. (See Section 6.1.4.)
6.1.4
Decimal Points
A decimal point (a period) should be used for each money amount regardless of whether the
amount is reported in dollars and cents or in whole dollars, or whether or not the vertical line that
separates the dollars from the cents is present. The decimal points must be vertically aligned when
possible.
Example.
5 State and local taxes
a State and local income taxes.....................5a.000.00
b State and local real estate taxes................5b.
c State and local personal property taxes....5c.000.00
or

October 23, 2023 1118 Bulletin No. 2023–43
a State and local income taxes.....................(5a)000.00
b State and local real estate taxes................(5b)
c State and local personal property taxes....(5c)000.00
6.1.5
Multi-Page Forms
When submitting a multi-page form, send all its pages in the same package. If you will not be
producing certain pages, note that in your cover letter.
Section 6.2 – Additional Instructions for All Forms
6.2.1
Use of
Your
Own Internal
Control Numbers and
Identifying Symbols
You may show the computer-prepared internal control numbers and identifying symbols on the
substitute if using such numbers or symbols is acceptable to the taxpayer and the taxpayer’s
representative. Such information must not be printed in the top 0.5 inch clear area of any form or
schedule requiring a signature. Except for the actual tax return form (Forms 1040, 1040-SR, 1120,
940, 941, etc.), you may print in the left vertical and bottom left margins. The bottom left margin
you may use extends 3.5 inches from the left edge of the form. You may print internal control
numbers in place of the removed IRS catalog number.
6.2.2
Required Software ID
Number (Source Code)
on Computer- Prepared
Substitutes
In the February 2009 Government Accountability Office (GAO) report, “Many Taxpayers
Rely on Tax Software and IRS Needs to Assess Associated Risks” (GAO-09-297), the GAO
recommended that the IRS require a software identification number on all individual returns to
specifically identify the software package used to prepare each tax return. The IRS already has
this capability for all e-filed returns. In addition, many tax preparation software firms already
print an IRS-issued 3-letter source code on paper returns that are generated by their individual tax
software. This source code was assigned when the firms were seeking substitute forms approval
under this current publication.
In order to follow this GAO recommendation, the IRS will require that all tax preparation software
firms include the 3-letter source code on all paper tax returns created by their individual tax
preparation software. The many firms that currently have and display their source code on paper
returns generated from their software should continue to do so, and no change is necessary.
We have reviewed all software companies that passed Assurance Testing System (ATS) testing
last filing season and have determined that some firms do not currently have a source code. To
save you the burden of contacting us and for your convenience, we have assigned source codes
to those firms.
You should program your source code to be placed in the bottom left-hand corner of page one of
each paper form that will be generated by your individual tax return package. You do not need to
apply for a new source code annually.
If you already use a 3-letter source code and we have issued you one in error, you are unsure if
you were ever issued one, or you have other questions or concerns, you may contact Tax Forms
and Publications Special Services Section at substituteforms@irs.gov.
The IRS requires tax preparation software firms that participate in the IRS Free File Program
include the 3-letter FFF code on all paper Form 1040 returns created by their individual tax
preparation software.

Bulletin No. 2023–43 1119 October 23, 2023
If you participate in the IRS Free File Program, you should program the 3-letter FFF code to
be placed in the bottom left-hand corner of the first page of each paper Form 1040 that will be
generated by your individual tax return package. The 3-letter FFF code and the 3-letter source
code should be placed next to each other for consistency. If placing the 3-letter FFF code and the
3-letter source code next to each other is not possible, then above or below will be acceptable.
Example. The 3-letter FFF code and the 3-letter source code could be BCA-FFF or BCA FFF. A
dash or a space is needed to separate the 3-letter FFF code and the 3-letter source code.
6.2.3
Descriptions for Captions,
Lines, etc.
Descriptions
for captions, lines, etc., appearing on the substitute forms may be limited to one print
line by using abbreviations and contractions, and by omitting articles, prepositions, etc. However,
sufficient keywords must be retained to permit ready identification of the caption, line, or item.
6.2.4
Determining Final Totals
Explanatory detail and/or intermediate calculations for determining final line totals may be
included on the substitute. Preferably, such calculations should be submitted in the form of a
supporting statement. If intermediate calculations are included on the substitute, the line on which
they appear may not be numbered or lettered. Intermediate calculations may not be printed in the
right column.This column is reserved only for official numbered and lettered lines that correspond
to the ones on the official form. Generally, you may choose the format for intermediate calculations
or subtotals on supporting statements to be submitted.
6.2.5
Instructional Text on the
Official Form
Text on the official form, which is solely instructional (for example, “See instructions,” etc.), may
generally be omitted from the substitute form.
6.2.6
Intermingling Is Prohibited
Showing more than one form or schedule on the same printout page is prohibited. Both sides of
the paper may be used for multi-page forms, but it is unacceptable to intermingle forms.
For instance, Schedule E can be printed on both sides of the paper because the official form is
multi-page, with page 2 continued on the back. However, do not print Schedule E on the front
page and Schedule SE on the back page, or Schedule A on the front and Form 8615 on the back,
etc. Both pages of a substitute form must match the official form. The back page may be left blank
if the back page of the official form contains only the instructions.
6.2.7
Identifying Substitutes
Identify all computer-prepared substitutes clearly. Print the form designation 0.5 inch from the top
margin and 1.5 inches from the left margin. Print the title centered on the first line of print. Print
the tax year and, where applicable, the sequence number on the same line 0.5 inch to 1 inch from
the right margin. Include the taxpayer’s name and SSN on all forms and attachments. Also, print
the OMB number as reflected on the official form.
6.2.8
Negative Amounts
Negative (or loss) amount entries should be enclosed in brackets or parentheses or include a minus
sign. This assists in accurate computation and input of form data. The IRS preprints parentheses
in negative data fields on many official forms. These parentheses should be retained or inserted on
printouts of affected substitute forms.

October 23, 2023 1120 Bulletin No. 2023–43
Part 7
Miscellaneous Forms and Programs
Section 7.1 – Specifications for Substitute Schedules K-1
7.1.1
Requirements for Schedules
K-1
That Accompany
Forms 1041, 1065, and
1120-S
Because of significant changes to improve processing, prior approval is now required for substitute
Schedules K-1 that accompany Form 1041 (for estates and trusts), Form 1065 (for partnerships), or
Form 1120-S (for S corporations). Substitute Schedules K-1 should be as close as possible to exact
replicas of the official IRS schedules and follow the same process for submitting other substitute
forms and schedules. Before releasing their substitute forms, software vendors are responsible for
making any subsequent changes that have been made to the final official IRS forms after the draft
forms have been posted.
Submit substitute Schedule K-1 forms, in PDF format, to scrips@irs.gov for scannability
acceptance. Schedule K-1 forms that require testing do not need to be mailed to the Program. You
must include information on the substitute that can be tested. This information should be dummy
information. Use an “X” for alpha characters and “0” for numbers. The IRS will review and
provide feedback of any changes needed so that your forms can be recognized correctly.
Include the 6-digit form ID code in the upper right of Schedules K-1 of Forms 1041, 1065, and
1120-S. Allow at least 0.25 inch of white space around the 6-digit code.
• 661117 for Form 1041.
• 651123 for Form 1065.
• 671121 for Form 1120-S.
Schedules K-1 that accompany Forms 1041, 1065, or 1120-S must meet all specifications. The
specifications include, but are not limited to, the following requirements.
• You will no longer be able to produce Schedules K-1 that contain only those lines or boxes
that taxpayers are required to use. All lines must be included.
• The words “* See attached statement for additional information.” must be preprinted in the
lower right-hand side on Schedules K-1 of Forms 1041, 1065, and 1120-S.
• All Schedules K-1 that are filed with the IRS should be printed on commercial standard size
(8.5′′ x 11′′) paper (the international standard (A4) of 8.27′′ x 11.69′′ may be substituted).
• 10-point Helvetica Light Standard is preferred for all entries that are typed or made using a
computer.
• Submissions should include the IRS source code or NACTP vendor ID code printed on the
lower left corner of the form or in place of the IRS catalog number.
• Each recipient’s information must be on a separate sheet of paper. Therefore, you must
separate all continuously printed substitutes, by recipient, before filing with the IRS.
• No carbon copies or pressure-sensitive copies will be accepted.
• The Schedule K-1 must contain the name, address, and SSN or EIN of both the entity (estate,
trust, partnership, or S corporation) and the recipient (beneficiary, partner, or shareholder).

Bulletin No. 2023–43 1121 October 23, 2023
• The Schedule K-1 must contain the tax year, the OMB number, the schedule number (K-1), the
related form number (1041, 1065, or 1120-S), and the official schedule name in substantially
the same position and format as shown on the official IRS schedule.
• The Schedule K-1 must contain all the line items as shown on the official form, except for the
instructions, if any are printed on the back of the official Schedule K-1.
• The line items or boxes must be in the same order and arrangement as those on the official
form.
• The amount of each recipient’s share of each item must be shown. A partial percent should be
reflected as a decimal (for example, 501/2% should be 50.5%). Furnishing a total amount of
each item and a percentage (or decimal equivalent) to be applied to such total amount by the
recipient does not satisfy the law and the specifications of this revenue procedure.
• State or local tax-related information may not be included on the Schedules K-1 filed with the
IRS.
• The entity may have to pay a penalty if substitute Schedules K-1 are filed that do not conform
to specifications.
• Additionally, the IRS may consider the Schedules K-1 that do not conform to specifications
as not being able to be processed and may return Form 1041, 1065, or 1120-S to the filer to be
filed correctly.
Schedules K-1 that are 2-D bar-coded will continue to require prior approval from the IRS. (See
Sections 7.1.3 through 7.1.5.)
7.1.2
Special Requirements
for Recipient Copies of
Schedules K-1
Standardization
for reporting information is required for recipient copies of substitute Schedules
K-1 of Forms 1041, 1065, and 1120-S. Uniform visual standards are provided to increase
compliance by allowing recipients and practitioners to more easily recognize a substitute Schedule
K-1. The entity must furnish to each recipient a copy of Schedule K-1 that meets the following
requirements.
• Include the 6-digit form ID code in the upper right of Schedules K-1 of Forms 1041, 1065, and
1120-S. Allow white space around the 6-digit code.
– 661117 for Form 1041.
– 651123 for Form 1065.
– 671121 for Form 1120-S.
• You will no longer be able to produce Schedules K-1 that contain only those lines or boxes
that taxpayers are required to use. All lines must be included.
• The words “* See attached statement for additional information.” must be preprinted in the
lower right-hand side on Schedules K-1 of Forms 1041, 1065, and 1120-S.
• The Schedule K-1 must contain the name, address, and SSN or EIN of both the entity and
recipient.
• The Schedule K-1 must contain the tax year, the OMB number, the schedule number (K-1), the
related form number (1041, 1065, or 1120-S), and the official schedule name in substantially
the same position and format as shown on the official IRS schedule.

October 23, 2023 1122 Bulletin No. 2023–43
• All applicable amounts and information required to be reported must be titled and numbered
in the same manner as shown on the official IRS schedule. The line items or boxes must be in
the same order and arrangement and must be numbered like those on the official IRS schedule.
• The Schedule K-1 must contain all items required for use by the recipient. The instructions for
the schedule must identify the line or box number and code, if any, for each item as shown in
the official IRS schedule.
• The amount of each recipient’s share of each item must be shown. A partial percent should be
reflected as a decimal (for example, 501/2% should be 50.5%). Furnishing a total amount of
each line item and a percentage (or decimal equivalent) to be applied to such total amount by
the recipient does not satisfy the law and the specifications of this revenue procedure.
• Instructions to the recipient that are substantially similar to those on or accompanying the
official IRS schedule must be provided to aid in the proper reporting of the items on the
recipient’s income tax return. Where items are not reported to a recipient because they do not
apply, the related instructions may be omitted.
• The quality of the ink or other material used to generate recipients’ schedules must produce
clearly legible documents. In general, black chemical transfer inks are preferred.
• In order to assure uniformity of substitute Schedules K-1, the paper size should be standard
commercial (8.5′′ x 11′′) (the international standard (A4) of 8.27′′ x 11.69′′ may be substituted).
• The paper weight, paper color, font type, font size, font color, and page layout must be such
that the average recipient can easily decipher the information on each page. The preferred font
is Helvetica and a minimum of 10-point font.
• State or local tax-related information may be included on recipient copies of substitute
Schedules K-1. All non-tax-related information should be separated from the tax information
on the substitute schedule to avoid confusion for the recipient.
• The legend “Important Tax Return Document Enclosed” must appear in a bold and conspicuous
manner on the outside of the envelope that contains the substitute recipient copy of Schedule
K-1.
• The entity may have to pay a penalty if a substitute Schedule K-1 furnished to any recipient
does not conform to the specifications of this revenue procedure and results in impeding
processing.
7.1.3
Requirements for Schedules
K-1
With Two- Dimensional
(2- D) Bar Codes
Electronic filing is the preferred method of filing; however, 2-D bar code is the best alternative
method for paper processing.
In an effort to improve efficiency and increase data accuracy, the IRS partnered with the tax
software development community on a 2-D bar code project in 2003. Certain tax software
packages have been modified to generate 2-D bar codes on Schedules K-1. As a result, when
Schedules K-1 are printed using these programs, a bar code will print on the page.
Rather than manually transcribe information from the Schedule K-1, the IRS will scan the bar
code and electronically upload the information from the Schedule K-1. This will result in more
efficient operations within the IRS and fewer transcription errors for your clients.
Note. If software vendors do not want to produce bar-coded Schedules K-1, they may produce
the official IRS Schedules K-1 but cannot use the expedited process for approving bar-coded
Schedules K-1 and their parent returns as outlined in Section 7.1.6.

Bulletin No. 2023–43 1123 October 23, 2023
In addition to the requirements in Sections 7.1.1 and 7.1.2, the bar-coded Schedules K-1 must
meet the following specifications.
• The bar code should print in the space labeled “For IRS Use Only” on each Schedule K-1. The
entire bar code must print within the “For IRS Use Only” box surrounded by a white space of
at least 0.25 inch.
• Bar codes must print in PDF417 format.
• The bar codes must always be in the specified format with every field represented by at least a
field delimiter (carriage return). Leaving out a field in a bar code will cause every subsequent
field to be misread.
• Be sure to include the 6-digit form ID code in the upper right of Schedules K-1 of Forms 1041,
1065, and 1120-S. Allow white space around the 6-digit code.
– 661117 for Form 1041.
– 651123 for Form 1065.
– 671121 for Form 1120-S.
7.1.4
2-D Bar Code Specifications
for Schedules K-1
Follow these general specifications for preparing all 2-D bar-coded Schedules K-1.
• Numeric fields.
– Do not include leading zeros (except TINs, ZIP codes, and percentages).
– If negative value, the minus sign “–” must be present immediately to the left of the
number and part of the 12-position field.
– Do not use non-numeric characters except that the literal “STMT” can be put in money
fields.
– All money fields should be rounded to the nearest whole dollar amount—if a money
amount ends in 00 to 49 cents, drop the cents; if it ends in 50 to 99 cents, truncate the
cents and increment the dollar amount by one. Use the same rounding technique for the
bar-coded and the printed Schedules K-1.
– All numeric-only fields are right justified (except TINs and ZIP codes).
• All field lengths are expressed as maximum lengths. If the value in the field has fewer positions
or the software program does not support that many positions, put in the bar code only those
positions actually used.
• Alpha fields.
– Do not include leading blanks (left justified).
– Do not include trailing blanks.
– Use uppercase alpha characters only.

October 23, 2023 1124 Bulletin No. 2023–43
• Variable fields.
– Do not include leading blanks (left justified).
– Do not include trailing blanks.
– Use uppercase alpha characters, numerics, and special characters as defined in each field.
• Delimit each field with a carriage return.
• Express percentages as 6-digit numbers without the percent sign. Left justify with a leading
zero(s) (for percentages less than 100%) and no decimal point (decimal point is assumed
between 3rd and 4th positions). Examples: 25.32% expressed as “025320”; 105% expressed
as “105000”; 8.275% expressed as “008275”; 10.24674% expressed as “010247.”
• It is vital that the print routine reinitialize the bar code prior to printing each succeeding
Schedule K-1. Failure to do this will result in each Schedule K-1 for a parent return having the
same bar code as the document before it.
7.1.5
Approval Process for
Bar-
Coded Schedules K-1
Prior to releasing commercially available tax software that creates bar-coded Schedules K-1, the
printed schedule and the bar code must both be tested. If your company is creating bar-coded
Schedules K-1, you must receive certification for both the printed Schedule K-1, as well as the bar
code, before offering your product for sale. Bar-code testing must be done using the final official
IRS Schedule K-1. Bar-code approval requests must be resubmitted for any subsequent changes
to the official IRS form that would affect the bar code. Below are instructions and a sequence of
events that will comprise the testing process.
• The IRS has released the final Schedule K-1 bar-code specifications by publishing them on the
IRS.gov website (see IRS.gov/E-file-Providers/K-1-Bar-Code-Certification-Process).
• The IRS will publish a set of test documents that will be used to test the ability of tax
preparation software to create bar codes in the correct format.
• Software developers will submit two identical copies of the test documents—one to the IRS
and one to a contracted testing vendor.
• The IRS will use one set to ensure the printed schedules comply with standard substitute
forms specifications.
• If the printed forms fail to meet the substitute forms criteria, the IRS will inform the software
developer of the reason for noncompliance.
• The software developer must resubmit the Schedule(s) K-1 until it passes the substitute forms
criteria.
• The testing vendor will review the bar codes to ensure they meet the published bar-code
specifications.
• If the bar code(s) does not meet published specifications, the testing vendor will contact the
software developer directly, informing them of the reason for noncompliance.
• Software developers must submit new bar-coded schedules until they pass the bar-code test.
• When the bar code passes, the testing vendor will inform the IRS that the developer has passed
the bar-code test and the IRS will issue an overall approval for both the substitute form and the
bar code.

Bulletin No. 2023–43 1125 October 23, 2023
• After receiving this consolidated response, the software vendor is free to release software for
tax preparation as long as any subsequent revisions to the schedules do not change the fields.
• Find the mailing address for the testing vendor below. Separate and simultaneous mailings to
the IRS and the vendor will reduce testing time.
7.1.6
Procedures for Reducing
T
esting Time
In order to help provide incentives to the software development community to participate in the
Schedule K-1 2-D project, the IRS has committed to expediting the testing of bar-coded Schedules
K-1 and their associated parent returns. To receive this expedited service, follow the instructions
below.
• Mail the parent returns (Forms 1041, 1065, 1120-S) and associated bar-coded Schedule(s)
K-1 to the appropriate address below in a separate package from all other approval requests.
Internal Revenue Service
Attn: K-1 Substitute Forms Analyst
SE:W:CAR:MP:T:T:SP
Room 6411
1111 Constitution Ave. NW
Washington, DC 20224
• Mail one copy of the parent form(s) and Schedule(s) K-1 to the IRS and another copy to the
testing vendor at the address below.
Leidos-IRS Paper and Remittance
Processing Support (PRPS II)
Attn: Dane Hawkins
9737 Washingtonian Blvd.
Gaithersburg, MD 20878
• Include multiple email and phone contact points in the packages.
• While the IRS can expedite bar-coded Schedules K-1 and their associated parent returns, it
cannot expedite the approval of nonassociated tax returns.
• Vendors are encouraged to go to NACTP.org for compliance guidelines in regards to file size
and error-correction level.
• Submissions should include the IRS source code or NACTP vendor ID code printed on the
lower left corner of the form or in place of the IRS catalog number.
• If a change is made to the bar code after approval, be sure to increment the version number.
Section 7.2 – Guidelines for Substitute Forms 8655
7.2.1
Increased Standardization
for Forms 8655
Increased standardization
for reporting information on substitute Forms 8655 is now required to
aid in processing and for compliance purposes. Follow the guidelines in Section 7.2.2.

October 23, 2023 1126 Bulletin No. 2023–43
7.2.2
Requirements for
Substitute Forms 8655
Follow these specific requirements when producing substitute Forms 8655.
• The first line of the title must be “Reporting Agent Authorization.”
• If you want to include a reference to “State Limited Power of Attorney,” it can be in parentheses
under the title. “State” must be the first word within the parentheses.
• You must include “Form 8655” on the form.
• While the line numbers do not have to match the official form, the sequence of the information
must be in the same order.
• The size of any variable data must be printed in a font no smaller than 10 points.
• For adequate disclosure checks, the following must be included for each taxpayer.
– Name.
– EIN.
– Address.
• At this time, Form 944 will not be required if Form 941 is checked. Only those forms that the
reporting agent company supports need to be listed.
• The jurat (perjury statement) must be identical with the exception of references to line
numbers.
• A contact name and number for the reporting agent is not required.
• Any state information included should be contained in a separate section of the substitute
form. Preferably, this information will be in the same area as line 19 of the official form.
• All substitute Forms 8655 must be approved by the Program as outlined in the Form 8655
specifications in this current publication.
• If you have not already been assigned a 3-letter source code, you will be given one when your
substitute form is submitted for approval. This source code should be included in the lower
left corner of the form.
• The 20-business-day assumed approval policy does not apply to Form 8655 approvals.
7.2.3
Exception for Form 8655
Because of
how Form 8655 is processed and distributed to recipients, vendors are allowed to affix
their logo onto the substitute version of the form. This exception is for Form 8655 only.
Section 7.3 – Guidelines for Substitute Image Character Recognition (ICR) Forms
7.3.1
Overview
The following suggestions may be used as a guideline for creating easily scanned substitute tax
forms. If you choose to participate, please use the Form 1040 format provided in Exhibit C and
Exhibit D. The grid view is for user ease of understanding only and should be removed before
printing forms for submission.

Bulletin No. 2023–43 1127 October 23, 2023
Note. The exhibits are to show formatting only, and are not a current copy of the form. Please use
the most current version of any form to create the substitute tax form.
7.3.2
Automated Processing of
Certain Forms
Certain forms
have been redesigned for automated processing via ICR technology. As a result,
these forms have different requirements for reproduction. These specific requirements apply to
both the form image as well as the format of the variable data.
7.3.3
Form Design Requirements
• Forms should have a 0.5-inch margin on all sides.
• Nothing should be printed within the 0.5-inch margins.
• Vertical and horizontal lines should be replicated as they are on the IRS form.
• Printing should be in black ink on white paper. No color or shading should be used.
• Reproduce the exact text on each line as it appears on the IRS form. Do not abbreviate or leave
out text.
7.3.4
Data Format Requirements
• See Section 3.3.
• Rows 1–3 and 64–66, and columns 1–5 and 81–85 should be left blank.
• SSN and EIN fields should have dashes (for example, 999-99-9999 or 99-9999999).
• Do not use real data unless specifically directed (for example, printing 12345678912 vs.
XXXXXXXXXXX for bank routing number as required by Pub. 1345).
• Dollar value fields should be printed with commas and no decimals (for example, 999,999,999).
• Data placement should match defined areas on form. Variable data should not be printed
outside defined areas (for example, first, middle, last, and suffix fields should be printed where
they appear on the IRS form, not combined).
• Do not populate blank value fields with a zero. If there is no value for a field, leave it blank.
Exceptions include calculated fields with valid inputs that result in a value of zero.
• Vendor codes and company-specific printing information should only appear in the spaces
designated on the form.
Part 8
Additional Information
Section 8.1 – Forms for Electronically Filed Returns

October 23, 2023 1128 Bulletin No. 2023–43
8.1.1
Electronic Filing Program
Electronic filing is a method by which authorized providers transmit tax return information to
an IRS Service Center in the format of the official IRS forms. The IRS accepts both refund and
balance due forms that are filed electronically.
8.1.2
Applying To Participate in
IRS e-file
Anyone wishing to participate in IRS e-file of tax returns must submit an e-file application. The
application can be completed and submitted electronically on the IRS website at IRS.gov after
first registering for e-services on the website.
8.1.3
Obtaining the Taxpayer
Signature/ Submission of
Required Paper Documents
Taxpayers choosing to electronically prepare and file their returns will be required to use the Self-
Select PIN method as their signatures.
Electronic return originators (EROs) can e-file individual income tax returns only if the returns are
signed electronically using either the Self-Select or Practitioner PIN method.
Taxpayers must use Form 8453, U.S. Individual Income Tax Transmittal for an IRS e-file Return,
to send supporting documents that are required to be submitted to the IRS.
For specific information about electronic filing, refer to Pub. 1345, Handbook for Authorized IRS
e-file Providers of Individual Income Tax Returns.
8.1.4
Guidelines for Preparing
Substitute Forms in the
Electronic Filing Program
A participant in the electronic filing program who wants to develop a substitute form should
follow the guidelines throughout this publication and send a sample form for approval to the
Program at substituteforms@irs.gov. If you do not prepare substitute Form 8453 using a font in
which all IRS wording fits on a single page, the form will not be accepted.
Note. Use of unapproved forms could result in suspension of the participant from the electronic
filing program.
Section 8.2 – Effect on Other Documents
8.2.1
Effect on Other Documents
This revenue procedure supersedes Revenue Procedure 2022-31, 2022-43 I.R.B. 339.
Section 8.3 – Exhibits
Exhibit A — Form 1040-ES Voucher 20XX
Exhibit B — Substitute Form Checksheet
Exhibit C — Form 1040 With Grid
Exhibit D — Form 1040 Without Grid

Bulletin No. 2023–43 1129 October 23, 2023
41

Software Developers Voucher

October 23, 2023 1130 Bulletin No. 2023–43
42

IRS Checksheet

Bulletin No. 2023–43 1131 October 23, 2023
43

Form 1040 With Grid

October 23, 2023 1132 Bulletin No. 2023–43
44

Bulletin No. 2023–43 1133 October 23, 2023
45

Form 1040 Without Grid

October 23, 2023 1134 Bulletin No. 2023–43
46

Bulletin No. 2023–43 1135 October 23, 2023
Transfer of Credit under Sections 30D and 25E
from Taxpayer to Eligible Entity and Updated
Requirements for Qualified Manufacturers and
Sellers.
Rev. Proc. 2023-33
SECTION 1. PURPOSE
This revenue procedure sets forth the
procedures under §§ 30D(g) and 25E(f)
of the Internal Revenue Code (Code)
1
for
the transfer of the clean vehicle credit or
previously-owned clean vehicle credit
from the taxpayer who elects to trans-
fer such credit to an eligible entity.
These procedures will apply to trans-
fers of credits after December 31, 2023.
These procedures include registration
procedures with the Internal Revenue
Service (IRS) for qualified manufactur-
ers and sellers, as well as procedures for
dealer registration and the suspension
and revocation of that registration. This
revenue procedure also establishes a
program to make advance payments of
credit amounts to registered dealers. In
addition, this revenue procedure super-
sedes sections 5.01 and 6.03 of Rev.
Proc. 2022-42, 2022-52 I.R.B. 565,
providing new information for the tim-
ing and manner of submission of seller
reports, respectively. Finally, this reve-
nue procedure supersedes sections 6.01
and 6.02 of Rev. Proc. 2022-42, provid-
ing updated information on submission
of written agreements by manufacturers
to the IRS to be considered qualified
manufacturers, as well as the method of
submission of monthly reports by quali-
fied manufacturers.
SECTION 2. BACKGROUND
.01 Section 30D, Clean Vehicle Credit
(1) Section 30D was enacted by
§ 205(a) of the Energy Improvement
and Extension Act of 2008, Division B
of Public Law 110-343, 122 Stat. 3765,
3835 (October 3, 2008), to provide a
credit for purchasing and placing in ser-
vice new qualified plug-in electric drive
motor vehicles. Section 30D has been
amended several times since its enact-
ment, most recently by § 13401 of Public
Law 117-169, 136 Stat. 1818 (August 16,
2022), commonly known as the Inflation
Reduction Act of 2022 (IRA). In general,
the amendments made by § 13401 of the
IRA to § 30D apply to vehicles placed in
service after December 31, 2022, except
as provided in § 13401(k)(2) through (5)
of the IRA.
(2) Section 30D(a) allows a credit
for the taxable year with respect to each
new clean vehicle placed in service by a
taxpayer during the taxable year (§ 30D
credit). Section 30D(b) provides a maxi-
mum credit of $7,500 per vehicle, consist-
ing of $3,750 if certain critical minerals
requirements are met and $3,750 if cer-
tain battery components requirements are
met. These requirements are described in
§ 30D(e)(1) and (2), respectively.
(3) Section 30D(g) allows the taxpayer
to elect to transfer the § 30D credit in cer-
tain situations. Specifically, § 30D(g)(1)
provides that, subject to such regulations
or other guidance as the Secretary of the
Treasury or her delegate (Secretary) deter-
mines necessary, a taxpayer may elect to
transfer a § 30D credit with respect to a
new clean vehicle to an eligible entity
(transfer election). If the taxpayer who
acquires a new clean vehicle makes a
transfer election with respect to such vehi-
cle, the § 30D(a) credit that would oth-
erwise be allowed to such taxpayer with
respect to such vehicle is allowed to the
eligible entity specified in such election
(and not the taxpayer). Section 30D(g)(2)
defines an “eligible entity” with respect to
the vehicle for which the § 30D credit is
allowed as the dealer that sold such vehi-
cle to the taxpayer and that satisfies the
following four requirements of § 30D(g)
(2)(A) through (D) set forth in section
2.01(3)(a) through (d) of this revenue
procedure:
(a) The dealer, subject to § 30D(g)(4),
must be registered with the IRS for pur-
poses of § 30D(g)(2), at such time, and in
such form and manner, as the Secretary
prescribes.
(b) The dealer, prior to the transfer
election and not later than at the time of
sale, must have disclosed to the taxpayer
purchasing such vehicle:
(i) The manufacturer’s suggested retail
price,
(ii) The value of the § 30D credit
allowed and any other incentive available
for the purchase of such vehicle, and
(iii) The amount provided by the dealer
to such taxpayer as a condition of the
transfer election.
(c) The dealer, not later than at the
time of sale, must have paid the taxpayer
(whether in cash or in the form of a partial
payment or down payment for the pur-
chase of such vehicle) an amount equal
to the § 30D credit otherwise allowable to
such taxpayer.
(d) The dealer, with respect to any
incentive otherwise available for the pur-
chase of a vehicle for which a § 30D credit
is allowed under § 30D(a), including any
incentive in the form of a rebate or dis-
count provided by the dealer or manufac-
turer, must have ensured that:
(i) The availability or use of such incen-
tive does not limit the ability of a taxpayer
to make a transfer election, and
(ii) Such election does not limit the
value or use of such incentive.
(4) Section 30D(g)(3) addresses the
timing of the election and provides that
any transfer election cannot be made by
the taxpayer any later than the date on
which the vehicle for which the § 30D
credit is allowed is purchased.
(5) Section 30D(g)(4) provides that,
upon determination that a dealer has failed
to comply with the requirements described
in § 30D(g)(2), the dealer’s registration
may be revoked.
(6) Section 30D(g)(5) provides that,
with respect to any payment described
in § 30D(g)(2)(C), such payment is not
includible in the gross income of the tax-
payer and is not deductible with respect to
the dealer.
(7) Section 30D(g)(6) addresses the
application of certain other requirements
to the transfer election and provides that
in the case of any transfer election with
respect to any vehicle: (A) the basis reduc-
tion and no double benefit requirements of
§ 30D(f)(1) and (2) apply to the taxpayer
who acquired the vehicle in the same man-
ner as if the § 30D credit determined with
respect to such vehicle were allowed to
such taxpayer; (B) the election in § 30D(f)
(6) to not take the § 30D credit does not
apply; and (C) the vehicle identification
1
Unless otherwise specified, all “Section” or “§” references are to sections of the Code.

October 23, 2023 1136 Bulletin No. 2023–43
number (VIN) requirement of § 30D(f)(9)
is treated as satisfied if the eligible entity
provides the VIN of such vehicle to the
IRS in such manner as the Secretary may
provide.
(8) Section 30D(g)(7)(A) authorizes the
Secretary to establish a program to make
advance payments to registered dealers
in an amount equal to the cumulative
amount of the § 30D credits allowed under
§ 30D(a) with respect to any vehicles sold
by such entity for which a transfer elec-
tion has been made. Section 30D(g)(7)
(B) details that rules similar to the rules
of § 6417(d)(6) apply for purposes of any
excessive payments, and § 30D(g)(7)(C)
provides that, for purposes of 31 U.S.C.
1324, the payments under § 30D(g)(7)(A)
are treated in the same manner as a refund
due from a credit provision referred to in
31 U.S.C. 1324(b)(2).
(9) Section 30D(g)(8) defines the term
“dealer” as a person licensed by a State, the
District of Columbia, the Commonwealth
of Puerto Rico, any other territory or pos-
session of the United States, an Indian
tribal government, or any Alaska Native
Corporation (as defined in § 3 of the
Alaska Native Claims Settlement Act (43
U.S.C. 1602(m)) to engage in the sale of
vehicles. Section 30D(g)(9) defines the
term “Indian tribal government” as the
recognized governing body of any Indian
or Alaska Native tribe, band, nation,
pueblo, village, community, component
band, or component reservation, individ-
ually identified (including parenthetically)
in the list published most recently as of
the date of enactment of § 30D(g) (that is,
August 16, 2022) pursuant to § 104 of the
Federally Recognized Indian Tribe List
Act of 1994 (25 U.S.C. 5131).
(10) Section 30D(g)(10) provides that,
in the case of any taxpayer who has made
a transfer election with respect to a new
clean vehicle and received a payment
from an eligible entity, if the § 30D credit
would otherwise (but for § 30D(g)) not
be allowable to such taxpayer pursuant
to the application of the limitation based
on modified adjusted gross income in
§ 30D(f)(10), the income tax imposed on
such taxpayer under chapter 1 of the Code
for the taxable year in which such vehicle
was placed in service must be increased
by the amount of the payment received by
such taxpayer.
(11) Section 13401(k)(4) of the IRA
provides that the ability for a taxpayer
to elect to transfer a § 30D credit under
§ 30D(g) applies to vehicles placed in ser-
vice after December 31, 2023.
.02 Section 25E, Previously-Owned
Clean Vehicles Credit
(1) Section 13402 of the IRA added
§ 25E to the Code. Section 25E(a) pro-
vides that, in the case of a qualified buyer
who during a taxable year places in ser-
vice a previously-owned clean vehicle, an
income tax credit is allowed for the tax-
able year equal to the lesser of: (1) $4,000,
or (2) the amount equal to 30 percent of
the sale price with respect to such vehicle
(§ 25E credit).
(2) Section 25E(c)(1) defines “previ-
ously-owned clean vehicle”, with respect
to a taxpayer, as a motor vehicle that satis-
fies the following requirements:
(a) The model year of the motor vehi-
cle is at least 2 years earlier than the cal-
endar year in which the taxpayer acquires
such vehicle.
(b) The original use of the motor vehi-
cle commences with a person other than
the taxpayer.
(c) The motor vehicle is acquired by
the taxpayer in a qualified sale.
(d) The motor vehicle:
(i) Meets the requirements of § 30D(d)
(1)(C), (D), (E), (F), and (H) (except for
§ 30D(d)(1)(H)(iv)), or
(ii) Is a motor vehicle that (I) satis-
fies the requirements under § 30B(b)(3)
(A) and (B), and (II) has a gross vehicle
weight rating of less than 14,000 pounds.
(3) Section 25E(c)(2) defines a “quali-
fied sale” as a sale of a motor vehicle:
(i) By a dealer (as defined in § 30D(g)
(8)),
(ii) For a sale price that does not exceed
$25,000, and
(iii) That is the first transfer since the
date of enactment to a qualified buyer
other than the person with whom the orig-
inal use of such vehicle commenced.
(4) Section 25E(c)(3) defines the term
“qualified buyer” for purposes of § 25E as
a taxpayer:
(a) Who is an individual,
(b) Who purchases such vehicle for use
and not for resale,
(c) With respect to whom no deduction
is allowable with respect to another tax-
payer under § 151, and
(d) Who has not been allowed a § 25E
credit for any sale of a motor vehicle
during the 3-year period ending on the
date of the sale of the previously-owned
clean vehicle.
(5) Section 25E(c)(4) defines “motor
vehicle” and “capacity” to have the mean-
ing given such terms in § 30D(d)(2) and
(4), respectively.
(6) Section 25E(d) provides that no
credit is allowed under § 25(a) with
respect to any vehicle unless the taxpayer
includes the vehicle identification number
of such vehicle on the return of tax for the
taxable year.
(7) Section 25E(f) provides that rules
similar to § 30D(g) apply to the transfer
of a § 25E credit for previously-owned
vehicles (thus, a taxpayer also may elect
to transfer a § 25E credit). For purposes
of this revenue procedure, the program
established under §§ 30D(g)(7)(A) and
25E(f) to make advance payments of
amounts of § 30D credits and § 25E cred-
its to registered dealers with respect to
eligible clean vehicles sold by such deal-
ers for which a taxpayer makes a transfer
election is referred to as the “advance pay-
ment program.”
(8) Section 13402(e)(2) of the IRA
provides that the ability of a taxpayer
to elect to transfer a § 25E credit under
§ 25E(f) applies to vehicles acquired after
December 31, 2023.
.03 Revenue Procedure 2022-42.
(1) Revenue Procedure 2022-42, in
relevant part, established procedures for
qualified manufacturers to enter into writ-
ten agreements with the IRS in accordance
with §§ 30D(d)(1)(C) and 30D(d)(3), and
procedures for persons selling vehicles to
submit seller reports to the IRS.
(2) Sections 4.01 and 4.03 of Rev.
Proc. 2022-42 provide, respectively, that
a manufacturer must enter into a written
agreement with the IRS to become a qual-
ified manufacturer and must submit writ-
ten reports to the IRS containing required
information.
(3) Section 5.01 of Rev. Proc. 2022-42
provides, in relevant part, that the seller
of a clean vehicle must submit to the
Secretary a seller report containing cer-
tain information within fifteen (15) days
of the end of the calendar year in which
the sale occurs. Section 6.03 of Rev. Proc.
2022-42 provides that, beginning January

Bulletin No. 2023–43 1137 October 23, 2023
15, 2024, seller reports must be filed with
the IRS within fifteen days after the end of
the calendar year in which the sale occurs
in a format and method that the Secretary
provides.
(4) Section 6.01 of Rev. Proc. 2022-42
provides that manufacturers must send
their signed written agreements pursuant
to section 4.01 of Rev. Proc. 2022-42 to
IRS.Clean.Vehicle.Manufacturers@irs.
gov. Section 6.02 of Rev. Proc. 2022-42
provides, in relevant part, that qualified
manufacturers must file written monthly
reports with the IRS by the fifteenth of
the month. Qualified manufacturers must
send an email to IRS.Clean.Vehicles.
QM.Reporting@irs.gov indicating their
intent to submit monthly reports and the
IRS will respond with instructions on how
to submit their reporting information.
.04 Transfer Election and Advance
Payment Program Procedural
Requirements. The procedural rules
described in this Revenue Procedure
are designed in part to ensure program
integrity. In particular, advance payment
of the § 30D and § 25E credits poses
unique compliance challenges, since such
advance payments are not subject to the
same tax administration procedures that
apply to claiming a credit via return filing.
Furthermore, participation in the credit
transfer and advance payment program is
optional. The transfer of § 30D and § 25E
credits is elective on the part of the tax-
payer, and the eligible entity can decide
whether to offer to the taxpayer the abil-
ity to transfer the § 30D and § 25E credits
(thereby participating in the advance pay-
ment program). Taxpayers instead may
choose to wait and claim a § 30D or § 25E
credit on the taxpayer’s return. Section
30D(g)(1) provides that a taxpayer elec-
tion to transfer the § 30D credit is sub-
ject to the regulations or other guidance
that the Secretary determines necessary.
Section 30D(g)(7) instructs the Secretary
to establish a program for making advance
payments to eligible entities – that is, a
program to make payments to the eligible
entity before the eligible entity files its
Federal income tax return for the relevant
taxable year. Section 25E(f) provides that,
for purposes of § 25E, rules similar to the
rules of § 30D(g) apply. Taken together,
these provisions provide authority for the
Secretary to establish the parameters and
conditions of the transfer election and the
accompanying advance payment program
for those taxpayers and eligible entities
that choose to participate, in furtherance
of sound tax administration.
SECTION 3. DEFINITIONS
.01 In General. Terms used in this rev-
enue procedure and not defined in section
3 of this revenue procedure have the same
meaning as provided in §§ 30D and 25E,
the proposed regulations thereunder, and
the final regulations thereunder (once
issued).
.02 IRS Energy Credits Online Portal.
For purposes of this revenue procedure,
the “IRS Energy Credits Online Portal”
refers to the registration portal that man-
ufacturers and sellers must use to regis-
ter as a qualified manufacturer, seller, or
registered dealer. A link to the site will be
made available on the IRS website. Any
successor portal or successor site address
will be announced and made available on
the IRS website.
.03 Seller. For purposes of this revenue
procedure, “seller” means, for purposes of
§ 30D, the person who sells any new clean
vehicle to the taxpayer, or, for purposes of
§ 25E, the dealer (as defined in § 30D(g)
(8)) who sells any previously-owned clean
vehicle to the taxpayer.
SECTION 4. REGISTRATION
THROUGH THE ENERGY CREDITS
ONLINE PORTAL
.01 Overview of Registration
Requirements. This section 4 sets out the
registration requirements “IRS Energy
Credit Portal” with the IRS for various
aspects of the Energy Credits Online Portal
for manufacturers, sellers, and dealers. As
a preliminary matter, manufacturers, sell-
ers, and dealers must all register through
the IRS Energy Credits Online Portal, as
detailed in section 4.02 of this revenue
procedure. Manufacturers who wish to
become qualified manufacturers must fol-
low the registration procedures in sections
4.02(1) of this revenue procedure. Sellers
who are required to submit seller reports
must follow the registration procedures in
section 4.02(2) of this revenue procedure.
Sellers who wish to become registered
dealers and participate in the advance
payment program must follow the reg-
istration procedures in section 4.02(3)
of this revenue procedure. A dealer, as
defined is § 30D(g)(8) and the regula-
tions thereunder, must follow the regis-
tration requirements in sections 4.02(2)
and 4.02(3) of this revenue procedure to
become a registered dealer and participate
in the advance payment program.
.02 Registration through the IRS
Energy Credits Online Portal
(1) Qualified Manufacturer
Registration through the IRS Energy
Credits Online Portal. An individual
representative of the manufacturer must
register through the IRS Energy Credits
Online Portal and provide the required
information to request to become a qual-
ified manufacturer, consistent with section
4.01(1) of Revenue Procedure 2022-42.
The manufacturer’s representative will
need to sign in or create an account on
irs.gov in order to verify the manufactur-
er’s business tax information and register.
Help related to the IRS identity verifica-
tion process can be found on the sign-in
page or at www.irs.gov/registerhelp. This
individual representative of the manu-
facturer must be currently authorized to
legally bind the manufacturer in these
matters. Starting December 2023, a man-
ufacturer will be able to authorize more
than one employee to make representa-
tions on its behalf through the IRS Energy
Credits Online Portal.
(2) Seller Registration through the IRS
Energy Credits Online Portal. An individ-
ual representative of the seller must regis-
ter through the IRS Energy Credits Online
Portal and provide the required informa-
tion. The seller’s representative will need
to sign in or create an account on irs.gov
to verify the seller’s business tax informa-
tion and register. Help related to the IRS
identity verification process can be found
on the sign-in page or at www.irs.gov/reg-
isterhelp. This individual representative
of the seller must be currently authorized
to legally bind the seller in these matters.
Starting December 2023, a seller will be
able to authorize more than one employee
to make representations on its behalf
through the IRS Energy Credits Online
Portal. At the time of registration through
the IRS Energy Credits Online Portal, a
seller must provide the information listed
in section 4.02(2)(a) through (c) and (f) of

October 23, 2023 1138 Bulletin No. 2023–43
this revenue procedure and make certifi-
cations listed in section 4.02(d) and (e) of
this revenue procedure:
(a) Seller name, business address,
phone number, and email address.
(b) Seller Taxpayer Identification
Number (TIN) or Employer Identification
Number (EIN).
(c) Proof of a State, District of
Columbia, Indian tribal government, or
Alaska Native Corporation issued license
to sell vehicles (for § 25E sellers).
(d) Certification that, in the event a
buyer returns a vehicle within 30 days of
the time of sale, the seller will update the
seller report.
(e) In the case of a previously-owned
clean vehicle, certification that the seller
will provide each taxpayer with the fol-
lowing information:
(i) That the model year of the vehicle
is at least two years prior to the calendar
year of sale; and
(ii) That the transfer is the first transfer
of the vehicle since August 16, 2022, to a
person other than the person with whom
the original use of such vehicle com-
menced, excluding transfers to or between
dealers.
(f) Such other information as may be
required by the IRS Energy Credits Online
Portal.
(3) Dealer Registration through the IRS
Energy Credits Online Portal. An indi-
vidual representative of the dealer must
register through the IRS Energy Credits
Online Portal to become an eligible entity
that can participate in the advance pay-
ment program. The dealer’s representative
will need to sign in or create an account
on irs.gov to verify the dealer’s business
tax information and register. Help related
to the IRS identity verification process can
be found on the sign-in page or at www.
irs.gov/registerhelp. The registration and
each certification must be completed by
an individual representative of the dealer
who is currently authorized to legally
bind the dealer in these matters. Starting
December 2023, a dealer will be able to
authorize more than one employee to
make representations on its behalf through
the IRS Energy Credits Online Portal. A
dealer must register at least 15 days prior
to being able to receive any advance pay-
ments described in section 8 of this rev-
enue procedure. A dealer may register
through the IRS Energy Credits Online
Portal at any time after the publication
of this revenue procedure, but will not
become an eligible entity until January 1,
2024. The required information and certi-
fications may be updated in guidance pub-
lished in the Internal Revenue Bulletin or
via the IRS Energy Credits Online Portal.
At the time of registration, a dealer must
provide the information listed in section
4.02(3)(a), (b) and (g) of this revenue pro-
cedure and make each certification listed
in section 4.02(3)(c) through (f) of this
revenue procedure:
(a) The information listed in section
4.02(2)(a) through (f) of this revenue
procedure.
(b) Bank account information of the
dealer, for purposes of receiving elec-
tronic payments, as described in section
8.03 of this revenue procedure. Use of a
foreign bank account is not permitted.
(c) Certification that the dealer will
provide each taxpayer with the following
information:
(i) For purposes of the § 30D credit,
the manufacturer’s suggested retail price
(MSRP) of the new clean vehicle, or, for
purposes of the § 25E credit, the sale price
of the previously-owned clean vehicle;
(ii) The maximum amount of the credit
allowable and any other incentive avail-
able for the purchase of such vehicle;
(iii) The amount provided by the dealer
to such taxpayer as a condition of the
taxpayer making the transfer election.
This amount must equal the amount of
the credit potentially allowable as to the
purchase of the vehicle and such amount
may be provided in the form of cash or a
down payment or partial payment for the
purchase of the vehicle;
(iv) The modified adjusted gross
income (modified AGI) limitations pro-
vided in §§ 30D(f)(10) (in the case of the
§ 30D credit) or 25E(b)(2) (in the case of
the § 25E credit), as applicable; and
(d) Certification that, no later than
the time of sale of the vehicle, the dealer
will make the payment to the taxpayer
(whether in cash or in the form of a par-
tial payment or down payment for the pur-
chase of such vehicle) in an amount equal
to the credit otherwise allowable to such
taxpayer.
(e) Certification that the dealer,
with respect to any incentive otherwise
available for the purchase of a vehicle for
which a § 30D credit or § 25E credit is
allowed, including any incentive in the
form of a rebate or discount provided by
the dealer or manufacturer, ensured that:
(i) The availability or use of such incen-
tive does not limit the ability of a taxpayer
to make a transfer election, and
(ii) Such election does not limit the
value or use of such incentive.
(f) Certification that, in the event a
buyer returns a vehicle within 30 days
of the time of sale, and the dealer fails to
report such return through the IRS Energy
Credits Online Portal, the dealer will have
an excessive payment of any advance pay-
ment amount received for the sale of such
vehicle.
(g) Such other information as may be
required by the IRS Energy Credits Online
Portal.
.03 Reliance. For purposes of the
advance payment program, taxpayers
and sellers may rely on information and
certifications of a qualified manufacturer
(as defined in § 30D(d)(3)) described in
section 4 of Rev. Proc. 2022-42 providing
that a vehicle is eligible for a § 30D credit
or a § 25E credit, as applicable. Section
4.03 of this revenue procedure allows reli-
ance solely with respect to information
regarding the vehicle’s eligibility for the
§ 30D credit or § 25E credit. For example,
such reliance does not apply to informa-
tion regarding the taxpayer’s use of such
vehicle, whether the taxpayer satisfies the
modified AGI limitations, or whether the
taxpayer is a qualified buyer as defined in
§ 25E(c)(3).
.04 IRS Verifications.
(1) At the time of seller registration
through the IRS Energy Credits Online
Portal described in section 4.02(2) of this
revenue procedure, the IRS will validate
the seller’s business tax information,
including the North American Industry
Classification System (NAICS) Code. In
the event the seller fails the validation pro-
cess, the seller will be notified by the IRS.
(2) At the time of dealer registration
through the IRS Energy Credits Online
Portal described in section 4.02(3) of
this revenue procedure, the IRS will
confirm dealer tax compliance as well as
validate the dealer’s business tax infor-
mation, including the NAICS Code and
the dealer’s bank account information. In

Bulletin No. 2023–43 1139 October 23, 2023
the event the dealer fails the validation
process, the dealer will be notified by the
IRS.
.05 IRS Notification Regarding Dealer
Registration. The IRS will notify the
dealer if its registration is accepted or
rejected after considering the informa-
tion submitted by the dealer under section
4.02(3) and the verification checks under
section 4.05(2) of this revenue procedure.
If the dealer’s registration is accepted, the
IRS will issue a unique dealer identifica-
tion number to the dealer, which will be
available through the IRS Energy Credits
Online Portal.
.06 Right to Administrative Review if
Dealer Registration is Rejected. If a deal-
er’s registration is rejected, the dealer will
have the opportunity to request adminis-
trative review of the IRS’s determination
to the IRS. During the period that the issue
is pending, the dealer cannot participate in
the advance payment program.
SECTION 5. TRANSFER ELECTION
DISCLOSURE OBLIGATIONS
BETWEEN THE DEALER AND
TAXPAYER
.01 Disclosure to Taxpayer Electing
to Transfer the Credit. Not later than the
time of sale, the registered dealer must
provide the taxpayer electing to trans-
fer a credit under § 30D(g) or § 25E(f)
a written disclosure containing the infor-
mation described in sections 4.02(2)(e)
and 4.02(3)(c) of this revenue procedure,
signed under penalty of perjury by a per-
son currently authorized to bind the dealer
in these matters, and a copy of the seller
report described in section 7.03 of this
revenue procedure.
.02 Disclosure Obligation of Taxpayer
Electing to Transfer the Credit. Not later
than the time of sale, the taxpayer elect-
ing to transfer the credit under § 30D(g)
or § 25E(f) must furnish the information
listed in sections 5.02(1) through 5.02(3)
and 5.02(11) of this revenue procedure
to the registered dealer and make the
attestations in sections 5.02(4) through
5.02(10) through the IRS Energy Credits
Online Portal under penalty of perjury.
Not later than the time of sale, the regis-
tered dealer must upload the information
provided by the electing taxpayer in sec-
tions 5.02(1) through 5.02(3) and 5.02(11)
of this revenue procedure through the IRS
Energy Credits Online Portal. The infor-
mation the electing taxpayer must furnish
is as follows:
(1) Date of the taxpayer’s transfer
election;
(2) The taxpayer’s TIN;
(3) A photocopy of the taxpayer’s
valid, government-issued photo identifi-
cation document;
(4) An attestation, that either:
(a) The taxpayer’s prior year modified
AGI did not exceed the modified AGI lim-
itations, provided in §§ 30D(f)(10) (in the
case of the § 30D credit) or 25E(b)(2) (in
the case of the § 25E credit), as applicable,
or, if not known, to the best of the taxpay-
er’s knowledge and belief, the taxpayer’s
prior year modified AGI did not exceed
such limitation, or
(b) To the extent of the taxpayer’s
knowledge and belief, the taxpayer’s cur-
rent year modified AGI will not exceed the
modified AGI limitation;
(5) In the case of the § 30D credit, an
attestation that the vehicle will be used
predominantly for personal use;
(6) In the case of the § 25E credit, an
attestation that the taxpayer is a “qualified
buyer” as defined § 25E(c)(3);
(7) An attestation that the taxpayer will
file an income tax return for the taxable
year in which the vehicle is placed in
service on or before the due date of the
return (including extensions), reporting
the taxpayer’s eligibility for the § 30D or
§ 25E credit, as applicable, including the
vehicle’s VIN, and the taxpayer’s election
to transfer the credit to the eligible entity,
and repaying any credit amounts subject
to recapture, if applicable;
(8) An attestation that the taxpayer is
making this election prior to placing the
vehicle in service and that the taxpayer
has made no more than two transfer elec-
tions (including the election for which the
attestation is being made) during the tax-
able year;
(9) An attestation that in the event
the taxpayer’s modified AGI exceeds the
applicable modified AGI limitations, they
will repay the amount received as an addi-
tion to tax for the tax year the vehicle was
placed in service.
(10) An attestation that the taxpayer
has voluntarily elected to transfer the
credit; and
(11) Such other information as may be
required by the IRS Energy Credits Online
Portal.
SECTION 6. TAXPAYER ELECTION
TO TRANSFER CREDIT
.01 Taxpayer Election. A taxpayer may
make an election to transfer the credit
under § 30D or § 25E to a registered dealer
no later than the time of sale. A transfer
election will be considered made by a
taxpayer upon providing the information
described in section 5.02 of this revenue
procedure to the registered dealer.
.02 Two Transfer Elections per year.
A taxpayer may make no more than two
transfer elections per taxable year, con-
sisting of either two § 30D credits or one
§ 30D credit and one § 25E credit. In the
case of a joint return, each individual tax-
payer may make no more than two trans-
fer elections per taxable year.
.03 Amount of Transferred Credit. A
taxpayer making a transfer election must
transfer the entire amount of the credit
allowable to the taxpayer to the registered
dealer.
SECTION 7. QUALIFIED
MANUFACTURER WRITTEN
AGREEMENT AND REPORTS AND
SELLER REPORTS
.01 Qualified Manufacturer Written
Agreement. Beginning January 1, 2024,
to be considered a qualified manufac-
turer, manufacturers must have entered
into a written agreement pursuant to sec-
tion 4.01 of Rev. Proc. 2022-42 through
the IRS Energy Credits Online Portal.
The required attestation must be com-
pleted by a person currently authorized
to bind the manufacturer in these matters.
Manufacturers will not be considered
qualified manufacturers until they have
entered into written agreements with the
IRS. Manufacturers who previously regis-
tered and filed written agreements under
the procedures in section 6.01 of Rev.
Proc. 2022-42 must enter into new writ-
ten agreements through the IRS Energy
Credits Online Portal. The procedures for
manufacturers to enter into written agree-
ments prior to January 1, 2024 will remain
as described in section 6.01 of Rev. Proc.
2022-42.

October 23, 2023 1140 Bulletin No. 2023–43
.02 Written Reports by Qualified
Manufacturers. Beginning January 1,
2024, qualified manufacturers must file the
monthly written reports described in sec-
tion 4.02 of Rev. Proc. 2022-42 through
the IRS Energy Credits Online Portal by
the fifteenth of the month following the
month to which each monthly written
report relates. Qualified manufacturers
may file reports more frequently than once
a month. Beginning January 1, 2024, man-
ufacturers who previously registered as
qualified manufacturers under the proce-
dures in section 6.01 of Rev. Proc. 2022-
42 must file their written reports through
the IRS Energy Credits Online Portal.
The procedures for manufacturers to file
written reports prior to January 1, 2024,
will remain as described in section 6.02 of
Rev. Proc. 2022-42.
.03 Seller Reports.
(1) Time and Manner of Filing Seller
Reports. For sales for which the vehicle
is placed in service by the taxpayer on or
after January 1, 2024, a seller must file
the seller report described in section 5.01
of Rev. Proc. 2022-42 through the IRS
Energy Credits Online Portal within 3 cal-
endar days of the date of sale. Whenever
feasible, the seller report should be filed in
conjunction with the completion of the sale
and at the time the seller report is provided
to the purchaser. A seller may submit seller
reports through the IRS Energy Credits
Online Portal prior to January 1, 2024.
(2) Requirement to Furnish Copy of
Seller Report to Taxpayer. The seller must
provide the seller report as well as the con-
firmation of the submission of the seller
report through the IRS Energy Credits
Online Portal to the taxpayer purchasing
the vehicle within 3 calendar days of the
submission of the seller report through the
IRS Energy Credits Online Portal.
(3) IRS Rejection of Seller Report. In
the event that the information provided in
the seller report does not match the IRS’s
records, the IRS may reject the seller
report and notify the seller. In the event
the seller report is rejected, a dealer will
not be eligible for an advance payment
under section 8 of this revenue procedure.
The seller must notify the buyer within 3
calendar days of the IRS’s rejection of the
seller report.
(4) Updating and Rescinding of Seller
Reports. In the event the seller wishes to
update or rescind certain information on
a seller report for a scrivener’s error or
cancellation of sale, it must do so through
the IRS Energy Credits Online Portal as
promptly as possible after the original
submission occurred, either through an
update of the original seller report (if
within 48 hours of the original submis-
sion of the report) or through submission
of a new seller report correcting the prior
information. In the event of a return by
the buyer, the seller must file a new seller
report noting the return. The IRS will
acknowledge submission of the report
of the return. The seller must notify the
buyer within 3 calendar days of updating
or rescinding the seller report, and pro-
vide the buyer a copy. The seller must
also notify the buyer within 3 calendar
days of the IRS’s rejection of the updated
or rescinded report.
SECTION 8. ADVANCE PAYMENT TO
REGISTERED DEALERS
.01 Information Required for Advance
Payments. To receive advance payments
for each taxpayer’s transfer election,
the registered dealer must, at the time
of sale of the new clean vehicle or pre-
viously-owned clean vehicle, as appli-
cable, provide the vehicle’s VIN, the
seller report, and the taxpayer disclosure
information in section 5.02 of this rev-
enue procedure through the IRS Energy
Credits Online Portal. The information
must be provided by a person currently
authorized to bind the registered dealer
in these matters.
.02 Dealer Tax Compliance Checks.
In order to participate in the advance
payment program, the dealer must be
in dealer tax compliance. Prior to the
disbursement of advance payments as
described in this revenue procedure, and
on a continuing and regular basis, the
IRS will conduct dealer tax compliance
checks to ensure dealers remain in dealer
tax compliance.
.03 Time and Manner of Payments.
After the registered dealer provides the
information required in section 8.01 of
this revenue procedure through the IRS
Energy Credits Online Portal, and pro-
vided the seller report is accepted and
the registered dealer is in dealer tax com-
pliance, an electronic advance payment
will be disbursed to the most recent bank
account specified by the registered dealer.
No advance payments will be disbursed
by paper checks.
SECTION 9. RECORDKEEPING
.01 Registered Dealer Recordkeeping
Obligations. The registered dealer must
retain records for each taxpayer who
makes a transfer election in accordance
with section 6 of this revenue procedure
for a period of three years after the trans-
fer election is made. The record for each
taxpayer must include the information
described in section 5.02 of this revenue
procedure.
.02 Seller Recordkeeping Obligations.
The seller must retain records for each
seller report submitted in accordance with
section 7.03 of this revenue procedure for
a period of three years after the report is
filed with the IRS Energy Credits Online
Portal.
SECTION 10. SUSPENSION OF
REGISTERED DEALER ELIGIBILITY
.01 Suspension of Eligibility. The IRS
may suspend a registered dealer’s eligibil-
ity to participate in the advance payment
program for any of the following reasons:
(1) The IRS determines that the regis-
tered dealer provided inaccurate informa-
tion to the taxpayer regarding the vehicle’s
eligibility or the taxpayer’s eligibility for
the advance payment program;
(2) The IRS determines that the reg-
istered dealer provided inaccurate infor-
mation to the IRS regarding the vehicle’s
eligibility or taxpayer’s eligibility for the
advance payment program;
(3) The IRS determines that the regis-
tered dealer provided inaccurate informa-
tion to the IRS regarding its eligibility for
the advance payment program;
(4) The registered dealer fails to satisfy
the dealer tax compliance requirement in
section 8.02 of this revenue procedure;
(5) The IRS determines that the bank
account information that the dealer pro-
vided through the IRS Energy Credits
Online Portal is not valid;
(6) The dealer fails to report the return
of a vehicle through the IRS Energy
Credits Online Portal as required in sec-
tion 4.04(f) of this revenue procedure;

Bulletin No. 2023–43 1141 October 23, 2023
(7) The IRS determines it is necessary
to suspend the registered dealer’s registra-
tion to prevent abuse of the advance pay-
ment program.
.02 Notification by the IRS to the
Dealer. If the IRS determines a regis-
tered dealer’s eligibility for the advance
payment program should be suspended
pursuant to section 10.01 of this revenue
procedure, the IRS will notify the regis-
tered dealer of such determination.
.03 Correction. The registered dealer
will be notified of a suspension from the
advance payment program as well as the
reason for the suspension. The registered
dealer will be given an opportunity to
correct any errors that caused its suspen-
sion. The registered dealer cannot partic-
ipate in the advance payment program
from the moment it is notified of the sus-
pension, unless and until the suspension
is lifted.
.04 Revocation of Dealer’s
Registration. If the registered dealer
fails to correct the errors that caused the
suspension from the advance payment
program within a year of the suspen-
sion, the registered dealer’s registration
will be revoked, and the procedures in
section 11 of this revenue procedure will
apply.
SECTION 11. REVOCATION OF
REGISTERED DEALER ELIGIBILITY
AND RE-REGISTRATION
.01 Revocation of Dealer Eligibility.
The IRS may revoke a dealer’s registra-
tion to receive credits transferred under
§§ 30D(g) or 25E(f) and be eligible for
advance payments of such credits for any
of the following reasons:
(1) The registered dealer fails to comply
with any of the registration requirements
in section 4 of this revenue procedure;
(2) The registered dealer fails to satisfy
the dealer tax compliance requirement in
section 8.02 of this revenue procedure;
(3) The registered dealer loses its
license to sell vehicles;
(4) The IRS determines that the regis-
tered dealer provided inaccurate informa-
tion to the taxpayer regarding the vehicle
eligibility or the taxpayer’s eligibility for
the advance payment program, in circum-
stances where the IRS determines that
revocation, rather than suspension, as
referenced in section 10.01(1) of this rev-
enue procedure, is appropriate;
(5) The IRS determines that the regis-
tered dealer provided inaccurate informa-
tion to the IRS regarding vehicle eligibility
or taxpayer eligibility for the advance
payment program, in circumstances where
the IRS determines that revocation, rather
than suspension, as referenced in section
10.01(2) of this revenue procedure, is
appropriate;
(6) The registered dealer fails to retain
records for each taxpayer who makes
a transfer election for a period of three
years;
(7) The registered dealer’s registration
has been suspended three times in the pre-
ceding year in accordance with section 10
of this revenue procedure.
.02 Notification by the IRS to the
Dealer. If the IRS determines a registered
dealer’s eligibility for the advance pay-
ment program should be revoked, the IRS
will notify the registered dealer within 30
days of such determination.
.03 Right to Administrative Review. If a
registered dealer is notified of the revoca-
tion of its eligibility for the advance pay-
ment program, it will have the opportunity
to administrative review of the IRS’s deter-
mination. During the period that the issue
is pending, the registered dealer cannot
participate in the advance payment pro-
gram. Once the IRS makes a final deter-
mination, a registered dealer’s registration
will either be confirmed as revoked, fully
reinstated, or reinstated under conditions
as determined by the IRS.
.04 Re-Registration of Dealer. No ear-
lier than one calendar year after the date of
the notification described in section 11.02
of this revenue procedure revoking a reg-
istered dealer’s registration, a registered
dealer may apply to register again through
the IRS Energy Credits Online Portal, as
described in section 4.03(c) of this reve-
nue procedure.
.05 Non Eligibility for Re-Registration.
After a registered dealer’s registration
has been revoked, including any final
IRS determinations following the deal-
er’s request for an administrative review
of the revocation, if applicable, on three
separate occasions, the registered dealer
will be permanently barred from re-regis-
tering with the IRS and participating in the
advance payment program.
SECTION 12. EFFECT ON OTHER
DOCUMENTS
The requirements of sections 7.01 and
7.02 of this revenue procedure regarding
filing a written agreement to be consid-
ered a qualified manufacturer and filing
monthly written reports through the IRS
Energy Credits Online Portal supersede
the timing and manner of filing require-
ments in sections 6.01 and 6.02 of Rev.
Proc. 2022-42. The requirements of
section 7.03(1) of this revenue proce-
dure regarding submitting seller reports
through the IRS Energy Credits Online
Portal supersede the timing and manner
of filing requirements in sections 5.01 and
6.03 of Rev. Proc. 2022-42.
SECTION 13. PAPERWORK
REDUCTION ACT
The collection of information contained
in this revenue procedure has been sub-
mitted to the Office of Management and
Budget in accordance with the Paperwork
Reduction Act (44 U.S.C. 3507) under
control number 1545-2311.
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless the
collection of information displays a valid
OMB control number.
The collections of information in this
revenue procedure are in sections 4.02,
5.01, 5.02, 7.01, 7.02, 7.03(1), 8.01,
9.01, and 9.02. This information is col-
lected and retained to ensure that deal-
ers and sellers properly register with the
IRS, properly submit records to claim
the transfer election, and properly retain
records. This information will be used
to determine whether the dealer is eli-
gible for the claimed advance payment
election. The collection of information
is voluntary to obtain a benefit. The
likely respondents are corporations and
partnerships.
The estimated total annual reporting
burden is 296,688 hours.
The estimated annual burden per
respondent is one hour to complete the
dealer registration, as required under this
revenue procedure, and the estimated
number of respondents is 52,000. The
estimated annual burden per respondent
is .25 hours to complete the advanced

October 23, 2023 1142 Bulletin No. 2023–43
payment uploading of information, as
required under this revenue procedure and
the estimated number of respondents is
978,750. The estimated annual frequency
of responses is 1,030,750.
Books or records relating to a collec-
tion of information must be retained as
long as their contents may become mate-
rial in the administration of any internal
revenue law. Generally, tax returns and
tax return information are confidential, as
required by § 6103.
SECTION 14. DRAFTING
INFORMATION
The principal author of this revenue
procedure is the Office of Associate
Chief Counsel (Passthroughs & Special
Industries). However, other personnel
from the Department of the Treasury
and the IRS participated in its develop-
ment. For further information regard-
ing this revenue procedure, call the
energy security guidance contact num-
ber at (202) 317-5254 (not a toll-free
number).

Bulletin No. 2023–43 1143 October 23, 2023
Part IV
Notice of Proposed
Rulemaking
Preparer Tax Identification
Number (PTIN) User Fee
Update
REG-106203-23
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemak-
ing by cross-reference to interim final rule.
SUMMARY: In the Rules and
Regulations section of this issue of the
Federal Register, the Department of the
Treasury (Treasury Department) and the
IRS are issuing interim final regulations
that amend the current regulations to
reduce the amount of the user fee imposed
on tax return preparers to apply for or
renew a preparer tax identification num-
ber (PTIN). The text of the interim final
regulations also serves as the text of these
proposed regulations.
DATES: Electronic or written comments
and requests for a public hearing must be
received by December 4, 2023.
ADDRESSES: Commenters are strongly
encouraged to submit public comments
electronically. Submit electronic sub-
missions via the Federal eRulemaking
Portal at https://www.regulations.gov
(indicate IRS and REG-106203-23) by
following the online instructions for sub-
mitting comments. Requests for a public
hearing must be submitted as prescribed
in the “Comments and Requests for a
Public Hearing” section. Once submitted
to the Federal eRulemaking Portal, com-
ments cannot be edited or withdrawn. The
Treasury Department and the IRS will pub-
lish for public availability any comments
submitted to the IRS’s public docket. Send
paper submissions to: CC:PA:LPD:PR
(REG-106203-23), Room 5203, Internal
Revenue Service, P.O. Box 7604, Ben
Franklin Station, Washington, DC 20044.
FOR FURTHER INFORMATION
CONTACT: Concerning the proposed
regulations, Jamie Song at (202) 317-
6845; concerning cost methodology,
Michael A. Weber at (202) 803-9738;
concerning submissions of comments
or requests for a public hearing, Vivian
Hayes at (202) 317-6901 (not toll-free
numbers) or by email at publichearings@
irs.gov (preferred).
SUPPLEMENTARY INFORMATION:
Background and Explanation of
Provisions
Interim final regulations in the Rules
and Regulations section of this issue of the
Federal Register amend regulations under
26 CFR part 300 setting a user fee for indi-
viduals who apply for or renew a PTIN.
The Independent Offices Appropriation
Act of 1952 (IOAA), which is codified
at 31 U.S.C. 9701, authorizes agencies
to prescribe regulations that establish
user fees for services provided by the
agency. The IOAA provides that regula-
tions implementing user fees are subject
to policies prescribed by the President;
these policies are set forth in the Office of
Management and Budget Circular A-25,
58 FR 38142 (July 15, 1993). The text of
the interim final regulations also serves as
the text of these proposed regulations. The
preamble to the interim final regulations
explains the interim final regulations and
these proposed regulations.
Special Analyses
I. Regulatory Planning and Review
The OMB’s Office of Information
and Regulatory Analysis has determined
that this regulation is not significant and
subject to review under section 6(b) of
Executive Order 12866.
II. Regulatory Flexibility Act
Pursuant to the Regulatory Flexibility
Act (5 U.S.C. chapter 6), it is hereby cer-
tified that these proposed regulations will
not have a significant economic impact
on a substantial number of small entities.
The proposed regulations affect individ-
uals who prepare or assist in preparing
all or substantially all of a tax return or
claim for refund for compensation. Only
individuals, not businesses, can have a
PTIN. Thus, the economic impact of these
regulations on any small entity generally
will be a result of an individual tax return
preparer who is required to have a PTIN
owning a small business or a small busi-
ness otherwise employing an individual
tax return preparer who is required to have
a PTIN. The Treasury Department and the
IRS estimate that approximately 847,555
individuals will apply annually for an
initial or renewal PTIN. Although the
interim final regulations will likely affect
a substantial number of small entities, the
economic impact on those entities is not
significant. The interim final regulations
will establish an $11 fee per application
or renewal (plus $8.75 payable directly to
the contractor), which is a reduction from
the previously established fee and will not
have a significant economic impact on a
small entity. Accordingly, the Secretary
certifies that the rule will not have a sig-
nificant economic impact on a substantial
number of small entities, and a regulatory
flexibility analysis is not required.
III. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates
Reform Act of 1995 (UMRA) requires
that agencies assess anticipated costs and
benefits and take certain other actions
before issuing a final rule that includes
any Federal mandate that may result in
expenditures in any one year by a State,
local, or Tribal government, in the aggre-
gate, or by the private sector, of $100 mil-
lion in 1995 dollars, updated annually for
inflation. This rule does not include any
Federal mandate that may result in expen-
ditures by State, local, or Tribal govern-
ments, or by the private sector in excess of
that threshold.
IV. Executive Order 13132: Federalism
Executive Order 13132 (Federalism)
prohibits an agency from publishing any

October 23, 2023 1144 Bulletin No. 2023–43
rule that has federalism implications if
the rule either imposes substantial, direct
compliance costs on State and local gov-
ernments, and is not required by statute,
or preempts State law, unless the agency
meets the consultation and funding
requirements of section 6 of the Executive
order. These proposed regulations do not
have federalism implications and do not
impose substantial direct compliance
costs on State and local governments or
preempt State law within the meaning of
the Executive order.
V. Submission to Small Business
Administration
Pursuant to section 7805(f) of the
Internal Revenue Code, this notice of
proposed rulemaking has been submit-
ted to the Chief Counsel of the Office
of Advocacy of the Small Business
Administration for comment on its impact
on small business.
Comments and Requests for a Public
Hearing
Consideration will be given to com-
ments that are submitted timely to the
IRS as prescribed in this preamble under
the ADDRESSES heading. The Treasury
Department and the IRS request com-
ments on all aspects of the proposed reg-
ulations. Any comments submitted will
be made available at https://www.regula-
tions.gov or upon request.
A public hearing will be scheduled if
requested in writing by any person who
timely submits electronic or written com-
ments. Requests for a public hearing are
also encouraged to be made electronically.
If a public hearing is scheduled, notice of
the date and time for the public hearing
will be published in the Federal Register.
Statement of Availability of IRS
Documents
IRS notices and other guidance cited in
this preamble are published in the Internal
Revenue Bulletin (or Cumulative Bulletin)
and are available from the Superintendent
of Documents, U.S. Government
Publishing Office, Washington, DC
20402, or by visiting the IRS website at
https://www.irs.gov.
Drafting Information
The principal author of these reg-
ulations is Jamie Song, Office of the
Associate Chief Counsel (Procedure and
Administration). Other personnel from
the Treasury Department and the IRS
participated in the development of the
regulations.
List of Subjects in 26 CFR Part 300
Estate taxes, Excise taxes, Fees, Gift
taxes, Income taxes, Reporting and
recordkeeping requirements.
Proposed Amendments to the
Regulations
Accordingly, 26 CFR part 300 is pro-
posed to be amended as follows:
PART 300—USER FEES
Paragraph 1. The authority citation
for part 300 continues to read in part as
follows:
Authority: 31 U.S.C. 9701.
Par. 2. Section 300.11 is amended by
revising paragraphs (b) and (d) to read as
follows:
§300.11 Fee for obtaining a preparer
tax identification number.
* * * * *
(b) [The text of proposed § 300.11(b)
is the same as the text of § 300.11(b)
published elsewhere in this issue of the
Federal Register].
* * * * *
(d) [The text of proposed § 300.11(d)
is the same as the text of § 300.11(d)
published elsewhere in this issue of the
Federal Register].
Douglas W. O’Donnell,
Deputy Commissioner for Services and
Enforcement.
(Filed by the Office of the Federal Register
September 29, 2023, 4:15 p.m., and published in the
issue of the Federal Register for October 4, 2023, 88
FR 68525)
Notice of Proposed
Rulemaking
Transfer of Clean Vehicle
Credits Under Section 25E
and Section 30D
REG-113064-23
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemaking.
SUMMARY: This document contains
proposed regulations that would provide
guidance regarding certain clean vehi-
cle credits as established by the Inflation
Reduction Act of 2022. The proposed
regulations would provide guidance for
taxpayers who purchase qualifying pre-
viously-owned clean vehicles or purchase
qualifying new clean vehicles and intend
to transfer the amount of any previous-
ly-owned clean vehicle credit or new clean
vehicle credit to dealers who are entities
eligible to receive advance payments of
either credit. The proposed regulations
also would provide guidance for dealers to
become eligible entities to receive advance
payments of previously-owned clean vehi-
cle credits or new clean vehicle credits,
and rules regarding recapture of the cred-
its. The proposed regulations would affect
taxpayers intending to transfer previous-
ly-owned clean vehicle or new clean vehi-
cle credits and eligible entities to whom
the credits are transferred, as well as tax-
payers who purchased previously-owned
clean vehicles or new clean vehicles in the
event the vehicles cease being eligible for
the credits. The proposed regulations also
provide guidance on the meaning of three
new definitions added to the exclusive list
of “mathematical or clerical errors” relat-
ing to certain assessments of tax without a
notice of deficiency.
DATES: Written or electronic comments
and requests for a public hearing must be
received by December 11, 2023. Requests
for a public hearing must be submit-
ted as prescribed in the “Comments and
Requests for a Public Hearing” section.
ADDRESSES: Commenters are strongly
encouraged to submit public comments
electronically via the Federal eRulemaking

Bulletin No. 2023–43 1145 October 23, 2023
Portal at https://www.regulations.gov
(indicate IRS and REG-113064-23) by
following the online instructions for sub-
mitting comments. Requests for a public
hearing must be submitted as prescribed
in the “Comments and Requests for a
Public Hearing” section. Once submitted
to the Federal eRulemaking Portal, com-
ments cannot be edited or withdrawn. The
Department of the Treasury (Treasury
Department) and the IRS will publish for
public availability any comments sub-
mitted to the IRS’s public docket. Send
paper submissions to: CC:PA:LPD:PR
(REG-113064-23), Room 5203, Internal
Revenue Service, P.O. Box 7604, Ben
Franklin Station, Washington, DC 20044.
FOR FURTHER INFORMATION
CONTACT: Concerning the proposed
regulations, the Office of Associate
Chief Counsel (Passthroughs & Special
Industries) at (202) 317-6853 (not a toll-
free number); concerning submissions of
comments and requests for a public hear-
ing, call Vivian Hayes (202) 317-6901
(not a toll-free number) or send an email
to publichearings@irs.gov (preferred).
SUPPLEMENTARY INFORMATION:
Background
I. Overview
Public Law 117-169, 136 Stat. 1818
(August 16, 2022), commonly known as
the Inflation Reduction Act of 2022 (IRA),
added section 25E to the Internal Revenue
Code (Code) and amended section 30D
of the Code. Section 25E provides a
credit (section 25E credit) against the tax
imposed by chapter 1 of the Code (chap-
ter 1) with respect to a previously-owned
clean vehicle that a taxpayer purchases
and places in service. Section 30D pro-
vides a credit (section 30D credit) against
the tax imposed by chapter 1 with respect
to each new clean vehicle that a taxpayer
purchases and places in service. Both the
section 25E credit and section 30D credit
are determined and allowable with respect
to the taxable year in which the taxpayer
places the previously-owned clean vehi-
cle or new clean vehicle, as applicable,
in service. In addition, several of the
provisions of section 25E incorporate by
cross-reference some of the definitions
and rules of section 30D. The IRA also
amended section 6213 of the Code by add-
ing three new definitions to the exclusive
list of “mathematical or clerical errors” in
section 6213(g)(2). These new definitions
are set out in sections 6213(g)(2)(T), (U),
and (V).
This document contains pro-
posed amendments to the Income Tax
Regulations (26 CFR part 1) under sec-
tions 25E and 30D and to the Procedure
and Administration Regulations (26 CFR
part 301) under section 6213 (proposed
regulations). The proposed regulations
under section 30D supplement a notice
of proposed rulemaking (REG-120080-
22) published in the Federal Register (88
FR 23370) on April 17, 2023 (April 2023
proposed regulations) that contains initial
proposed regulations under section 30D as
amended by the IRA.
A. Section 30D New Clean Vehicle
Credit
Section 30D was enacted by section
205(a) of the Energy Improvement and
Extension Act of 2008, Division B of
Public Law 110-343, 122 Stat. 3765, 3835
(October 3, 2008), to provide a credit for
purchasing and placing in service new
qualified plug-in electric drive motor
vehicles. Section 30D has been amended
several times since its enactment, most
recently by section 13401 of the IRA. In
general, the amendments made by sec-
tion 13401 of the IRA to section 30D
apply to vehicles placed in service after
December 31, 2022, except as provided
in section 13401(k)(2) through (5) of the
IRA.
Effective beginning on April 18, 2023,
section 30D(b) provides a maximum credit
of $7,500 per new clean vehicle, consist-
ing of $3,750 if certain critical minerals
requirements are met and $3,750 if certain
battery components requirements are met.
These requirements are described in sec-
tion 30D(e)(1) and (2), respectively, and
the April 2023 proposed regulations.
The amount of the section 30D credit
is treated as a personal credit or a general
business credit depending on the charac-
ter of the vehicle. In general, the section
30D credit is treated as a personal credit
allowable under subpart A of part IV of
subchapter A of chapter 1. Section 30D(c)
(2). However, the amount of the section
30D credit that is attributable to prop-
erty that is of a character subject to an
allowance for depreciation is treated as
a current year business credit under sec-
tion 38(b) instead of being allowed under
section 30D. Section 30D(c)(1). Section
38(b)(30) lists as a current year business
credit the portion of the section 30D credit
to which section 30D(c)(1) applies. The
IRA did not amend section 30D(c)(1) or
(2).
The April 2023 proposed regulations
addressed the case of mixed-use vehicles.
Section 30D(c)(1) requires that so much
of the section 30D credit that would be
allowed under section 30D(a) for any
taxable year (determined without regard
to section 30D(c)) that is attributable to
a depreciable vehicle must be treated as
a general business credit under section 38
that is listed in section 38(b)(30) for such
taxable year (and not allowed under sec-
tion 30D(a)). In the case of a depreciable
vehicle the use of which is 50 percent or
more business use in the taxable year such
vehicle is placed in service, the section
30D credit that would be allowed under
section 30D(a) for that taxable year (deter-
mined without regard to section 30D(c))
that is attributable to such depreciable
vehicle must be treated as a general busi-
ness credit under section 38 that is listed
in section 38(b)(30) for such taxable year
(and not allowed under section 30D(a)). In
the case of a depreciable vehicle the busi-
ness use of which is less than 50 percent of
a taxpayer’s total use of the vehicle for the
taxable year in which the vehicle is placed
in service, the taxpayer’s section 30D
credit for that taxable year with respect to
that vehicle must be apportioned as fol-
lows: (i) the portion of the section 30D
credit corresponding to the percentage of
the taxpayer’s business use of the vehi-
cle is treated as a general business credit
under section 30D(c)(1) (and not allowed
under section 30D(a)); and (ii) the portion
of the section 30D credit corresponding to
the percentage of the taxpayer’s personal
use of the vehicle is treated as a section
30D credit allowed under section 30D(a)
pursuant to section 30D(c)(2).
The IRA added several special rules
under section 30D(f) applicable to vehi-
cles placed in service after December 31,

October 23, 2023 1146 Bulletin No. 2023–43
2022. These special rules include the rule
in section 30D(f)(9) that requires a tax-
payer to include on the taxpayer’s return
for the taxable year the vehicle identifi-
cation number (VIN) of the vehicle for
which the section 30D credit is claimed.
In addition, section 30D(f)(10) denies
the section 30D credit to certain high-in-
come taxpayers. More specifically, section
30D(f)(10)(A) provides that no credit is
allowed for any taxable year if (i) the lesser
of (I) the modified adjusted gross income
of the taxpayer for such taxable year, or
(II) the modified adjusted gross income
of the taxpayer for the preceding taxable
year, exceeds (ii) the threshold amount
(modified adjusted gross income (AGI)
Limitation). New section 30D(f)(10)(B)
provides that the threshold amount is (i)
in the case of a joint return or a surviving
spouse (as defined in section 2(a) of the
Code), $300,000, (ii) in the case of a head
of household (as defined in section 2(b) of
the Code), $225,000, and (iii) in the case
of any other taxpayer, $150,000. New
section 30D(f)(10)(C) defines “modified
adjusted gross income” as adjusted gross
income (AGI) increased by any amount
excluded from gross income under sec-
tions 911, 931, or 933.
The IRA added new section 30D(g)
to the Code, which allows the taxpayer
to elect to transfer the section 30D credit
in certain situations for vehicles placed in
service after December 31, 2023. Section
30D(g)(1) provides that subject to such
regulations or other guidance as the
Secretary of the Treasury or her delegate
(Secretary) determines necessary, a tax-
payer may elect to transfer a section 30D
credit with respect to a new clean vehi-
cle to an eligible entity (vehicle transfer
election). If the taxpayer who acquires a
new clean vehicle makes a vehicle trans-
fer election under section 30D(g) with
respect to such vehicle, the section 30D
credit that would otherwise be allowed to
such taxpayer with respect to such vehicle
is allowed to the eligible entity specified
in such election (and not the taxpayer).
Section 30D(g)(2) defines an “eligible
entity” with respect to the vehicle for
which the section 30D credit is allowed as
the dealer that sold such vehicle to the tax-
payer and that satisfies the following four
requirements set forth in section 30D(g)
(2)(A) through (D): (i) the dealer, subject
to section 30D(g)(4), must be registered
with the Secretary for purposes of section
30D(g)(2), at such time, and in such form
and manner, as the Secretary prescribes;
(ii) the dealer, prior to the vehicle transfer
election and not later than at the time of
sale, must have disclosed to the taxpayer
purchasing such vehicle the manufactur-
er’s suggested retail price, the value of the
section 30D credit allowed and any other
incentive available for the purchase of
such vehicle, and the amount provided by
the dealer to such taxpayer as a condition
of the vehicle transfer election; (iii) the
dealer, not later than at the time of sale,
must have paid the taxpayer (whether in
cash or in the form of a partial payment
or down payment for the purchase of such
vehicle) an amount equal to the credit oth-
erwise allowable to such taxpayer; and
(iv) the dealer with respect to any incen-
tive otherwise available for the purchase
of a vehicle for which a section 30D credit
is allowed, including any incentive in the
form of a rebate or discount provided by
the dealer or manufacturer, must have
ensured that the availability or use of such
incentive does not limit the ability of a
taxpayer to make a vehicle transfer elec-
tion, and such election does not limit the
value or use of such incentive.
Section 30D(g)(3) addresses the tim-
ing of the transfer and provides that any
vehicle transfer election cannot be made
by the taxpayer any later than the date on
which the vehicle for which the section
30D credit is allowed is purchased.
Section 30D(g)(4) provides that upon
determination by the Secretary that a
dealer has failed to comply with the
requirements described in section 30D(g)
(2), the Secretary may revoke the dealer’s
registration.
Section 30D(g)(5) provides that with
respect to any payment described in sec-
tion 30D(g)(2)(C), such payment is not
includible in the gross income of the tax-
payer and is not deductible with respect to
the dealer.
Section 30D(g)(6) addresses the appli-
cation of certain other requirements to the
transfer of credit and provides that in the
case of any vehicle transfer election with
respect to any vehicle: (i) the basis reduc-
tion and no double benefit requirements
of section 30D(f)(1) and (2) apply to the
taxpayer who acquired the vehicle in the
same manner as if the section 30D credit
determined with respect to such vehicle
were allowed to such taxpayer; (ii) the
election in section 30D(f)(6) to not take
the section 30D credit does not apply;
and (iii) the VIN requirement of section
30D(f)(9) is treated as satisfied if the eligi-
ble entity provides the VIN of such vehi-
cle to the Secretary in such manner as the
Secretary may provide.
Section 30D(g)(7)(A) provides for
the establishment of a program to make
advance payments to eligible entities in an
amount equal to the cumulative amount
of the credits allowed with respect to any
vehicles sold by such entity for which a
vehicle transfer election described in sec-
tion 30D(g)(1) has been made. Section
30D(g)(7)(B) provides that rules similar
to the rules of section 6417(d)(6) of the
Code apply for purposes of the advance
payment rules, and section 30D(g)(7)(C)
provides that for purposes of 31 U.S.C.
1324, the payments under section 30D(g)
(7)(A) are treated in the same manner as a
refund due from a credit provision referred
to in 31 U.S.C. 1324(b)(2).
Section 30D(g)(8) defines the term
“dealer” as a person licensed by a State, the
District of Columbia, the Commonwealth
of Puerto Rico, any other territory or pos-
session of the United States, an Indian
tribal government, or any Alaska Native
Corporation (as defined in section 3 of
the Alaska Native Claims Settlement Act
(43 U.S.C. 1602(m)) to engage in the sale
of vehicles. Section 30D(g)(9) defines an
“Indian tribal government” as the recog-
nized governing body of any Indian or
Alaska Native tribe, band, nation, pueblo,
village, community, component band, or
component reservation, individually iden-
tified (including parenthetically) in the
list published most recently as of the date
of enactment of section 30D(g) (that is,
August 16, 2022) pursuant to section 104
of the Federally Recognized Indian Tribe
List Act of 1994 (25 U.S.C. 5131).
Section 30D(g)(10) provides that in
the case of any taxpayer who has made a
vehicle transfer election with respect to a
new clean vehicle and received a payment
from an eligible entity, if the section 30D
credit would otherwise (but for section
30D(g)) not be allowable to such taxpayer
pursuant to the application of the modified
AGI limitations in section 30D(f)(10),

Bulletin No. 2023–43 1147 October 23, 2023
the income tax imposed on such taxpayer
under chapter 1 for the taxable year in
which such vehicle was placed in service
must be increased by the amount of the
payment received by such taxpayer.
No section 30D credit is allowed with
respect to a vehicle placed in service after
December 31, 2032. Section 13401(k)(4)
of the IRA provides that the ability for a
taxpayer to elect to transfer a section 30D
credit under section 30D(g) applies to
vehicles placed in service after December
31, 2023.
B. Section 25E Previously-Owned Clean
Vehicles Credit
Section 13402 of the IRA added sec-
tion 25E to the Code. Section 25E pro-
vides that, in the case of a qualified buyer
who during a taxable year places in ser-
vice a previously-owned clean vehicle, an
income tax credit (that is, the section 25E
credit) is allowed for the taxable year in an
amount equal to the lesser of: (1) $4,000,
or (2) the amount equal to 30 percent of
the sale price with respect to such vehicle.
Section 25E(b)(1) sets a limitation
based on modified adjusted gross income
and provides that no section 25E credit
is allowed for any taxable year if (A) the
lesser of (i) the modified adjusted gross
income of the taxpayer for such taxable
year, or (ii) the modified adjusted gross
income of the taxpayer for the preceding
taxable year, exceeds (B) the threshold
amount. The threshold amount is set forth
in section 25E(b)(2) and varies based on
a taxpayer’s filing status. In the case of
a taxpayer filing a joint return or who is
a surviving spouse (as defined in section
2(a)), the threshold amount is $150,000.
In the case of a taxpayer who is a head
of household (as defined in section 2(b)),
the threshold amount is $112,500. In the
case of any other taxpayer, the threshold
amount is $75,000. Section 25E(b)(3)
defines modified adjusted gross income
as adjusted gross income increased by
any amount excluded from gross income
under sections 911, 931, or 933.
Section 25E(c) defines certain terms
for purposes of the section 25E credit.
Section 25E(c)(1) defines a “previous-
ly-owned clean vehicle” as, with respect
to a taxpayer, a motor vehicle that satis-
fies the following four requirements set
forth in section 25E(c)(1)(A) through (D):
(i) the model year of the motor vehicle is
at least 2 years earlier than the calendar
year in which the taxpayer acquires such
vehicle; (ii) the original use of the motor
vehicle commences with a person other
than the taxpayer; (iii) the motor vehicle
is acquired by the taxpayer in a qualified
sale, and (iv) the motor vehicle meets the
requirements of section 30D(d)(1)(C),
(D), (E), (F), and (H) (except for the orig-
inal use requirement of section 30D(d)(1)
(H)(iv)), or is a motor vehicle that satis-
fies the requirements under section 30B(b)
(3)(A) and (B), and has a gross vehicle
weight rating of less than 14,000 pounds.
Section 25E(c)(2) defines a “qualified
sale” as a sale of a motor vehicle (i) by
a dealer (as defined in section 30D(g)(8)),
(ii) for a sale price which does not exceed
$25,000, and (iii) that is the first transfer
since the date of enactment of the IRA
(that is, August 16, 2022) to a qualified
buyer other than the person with whom the
original use of such vehicle commenced.
Section 25E(c)(3) defines a “qualified
buyer” as, with respect to a sale of a motor
vehicle, a taxpayer who is an individual
with respect to whom no deduction is
allowable with respect to another taxpayer
under section 151, who purchases such
vehicle for use and not for resale, and who
has not been allowed a section 25E credit
for any sale during the 3-year period end-
ing on the date of the sale of such vehicle.
Section 25E(c)(4) defines a “motor
vehicle” and “capacity” to have the mean-
ing given to such terms in section 30D(d)
(2) and (4), respectively.
Section 25E(d) provides that no sec-
tion 25E credit is allowed with respect to
any vehicle unless the taxpayer includes
the VIN of such vehicle on the taxpayer’s
tax return for the taxable year. Section
25E(e) provides that rules similar to the
rules of section 30D(f) (without regard to
paragraph (10) or (11) thereof) apply for
purposes of section 25E. Section 25E(f)
provides that rules similar to section
30D(g) apply to the transfer of a section
25E credit for previously-owned vehicles
(thus, a taxpayer also may elect to transfer
a section 25E credit).
Section 25E applies to vehicles
acquired after December 31, 2022. No
section 25E credit is allowed with respect
to a vehicle acquired after December 31,
2032. Section 13402(e)(2) of the IRA
provides that the ability of a taxpayer to
elect to transfer a section 25E credit under
section 25E(f) applies to vehicles placed
in service by the taxpayer after December
31, 2023.
C. Section 45W Qualified Commercial
Clean Vehicle Credit
Section 13403(a) of the IRA added
section 45W to the Code, which is effec-
tive for vehicles acquired after December
31, 2022, and before January 1, 2033. A
taxpayer can claim a section 45W credit
for purchasing and placing in service a
qualified commercial clean vehicle, as
defined in section 45W(c), during the tax-
able year. Section 45W(b)(1) provides that
the amount of the section 45W credit is
the lesser of: 15 percent of the taxpayer’s
basis in the vehicle (30 percent in the case
of a vehicle not powered by a gasoline or
diesel internal combustion engine), or the
incremental cost of the vehicle. Section
45W(b)(2) provides that the incremental
cost of any qualified commercial clean
vehicle is an amount equal to the excess
of the purchase price for such vehicle
over the purchase price of a comparable
vehicle. Section 45W(b)(3) defines “com-
parable vehicle” to mean any vehicle that
is powered solely by a gasoline or diesel
internal combustion engine and is com-
parable in size and use to such vehicle.
Section 45W(b)(4) provides that the 45W
credit is limited to $7,500 in the case of
a vehicle that has a gross vehicle weight
rating of less than 14,000 pounds, and
$40,000 for all other vehicles.
Section 45W(c) defines “qualified com-
mercial clean vehicle” for purposes of the
section 45W credit.

Section 45W(d) estab-
lishes special rules for purposes of the
section 45W credit, including the appli-
cation of basis reduction, domestic usage,
and recapture rules similar to those under
section 30D(f) of the Code and a rule dis-
allowing a double benefit under section
45W for a taxpayer claiming a new clean
vehicle credit under section 30D. Section
45W(e) provides that no section 45W
credit is allowed with respect to any vehi-
cle unless the taxpayer includes the VIN
of such vehicle on the tax return for the
taxable year. Section 45W(f) grants the
Secretary authority to issue regulations or

October 23, 2023 1148 Bulletin No. 2023–43
other guidance to carry out the purposes
of section 45W, including regulations or
other guidance relating to determination
of the incremental cost of any qualified
commercial clean vehicle.
D. Section 6213 restrictions applicable to
deficiencies; petition to Tax Court
Section 6213(b)(1) authorizes the IRS
to make certain assessments of mathemat-
ical or clerical errors without first issu-
ing a notice of deficiency under section
6213(a). In lieu of a notice of deficiency
giving the taxpayer 90 days to file a peti-
tion in the Tax Court, section 6213(b)(1)
requires the IRS to provide the taxpayer
notice that an assessment has been or will
be made based on a mathematical or cler-
ical error. Section 6213(b)(2)(A) provides
that the taxpayer has 60 days to request
an abatement of such assessment. If the
taxpayer timely requests abatement, then
the IRS must abate the assessment. If an
assessment is abated, the IRS must first
provide a notice of deficiency under sec-
tion 6213(a) before the IRS can reassess
the tax.
Math error assessments were first
authorized by section 274(f) of the
Revenue Bill of 1926. The legislative his-
tory provided that “in the case of a mere
mathematical error appearing upon the
face of the return, assessment of a tax due
to such mathematical error may be made
at any time, and that such assessment shall
not be regarded as a deficiency notifica-
tion.” H.R. Rep. No. 69-1, at 11 (1926).
The Tax Reform Act of 1976 added sec-
tion 6213(f)(2) (current section (g)(2)) to
the Code, which defined “mathematical
or clerical error” as: (A) an error in addi-
tion, subtraction, multiplication, or divi-
sion shown on the return; (B) an incorrect
use of an IRS table if the error is apparent
from the existence of other information
on the return; (C) inconsistent entries on
the return; (D) an omission of informa-
tion required to be supplied on the return
in order to substantiate an item on that
return; and (E) an entry of a deduction or
credit item in an amount which exceeds a
statutory limit which is either (a) a speci-
fied monetary amount or (b) a percentage,
ratio, or fraction — if the items entering
into the application of that limit appear on
that return.
The definition of mathematical or
clerical error as set out in 1976 contained
only these five specific items, all of
which could be ascertained directly from
the face of a return. These items remain
in current section 6213(g)(2)(A) – (E).
Since that time, Congress has expanded
the definition of “mathematical or cleri-
cal error” in section 6213(g)(2) several
times, and in 1998, added flush lan-
guage to section 6213(g)(2) that applies
to all section 6213(g)(2) subparagraphs:
“A taxpayer shall be treated as having
omitted a correct TIN [taxpayer iden-
tification number] for purposes of the
preceding sentence if information pro-
vided by the taxpayer on the return with
respect to the individual whose TIN was
provided differs from the information
the Secretary obtains from the person
issuing the TIN.” The legislative history
indicates that Congress added this lan-
guage to clarify that a correct TIN is one
that was assigned by the Social Security
Administration (SSA) or the IRS to the
individual identified on the return, and
that there should be no inconsistencies
between the data that is reported on the
return and the data from the agency issu-
ing the TIN. H.R. Conf. Rep. No. 825,
105th Cong. 2d Sess. 1588 (1998).
II. Prior Guidance
A. Notice 2022-46
On October 5, 2022, the Treasury
Department and the IRS published Notice
2022-46, 2022-43 I.R.B. 302. The notice
requested general comments on issues
arising under sections 25E and 30D, as
well as specific comments concerning:
(1) definitions; (2) critical minerals and
battery components; (3) foreign entities
of concern; (4) recordkeeping and report-
ing; (5) eligible entities; (6) elections to
transfer and advance payments; and (7)
recapture. The Treasury Department and
the IRS received 884 comments from
industry participants, environmental
groups, individual consumers, and other
stakeholders. The Treasury Department
and the IRS appreciate the commenters’
interest and engagement on these issues.
These comments have been carefully con-
sidered in the preparation of the proposed
regulations.
B. Revenue Procedure 2022-42
On December 12, 2022, the Treasury
Department and the IRS published
Revenue Procedure 2022-42, 2022-52
I.R.B. 565, providing guidance for qual-
ified manufacturers to enter into written
agreements with the IRS, as required in
sections 30D, 25E, and 45W, and to report
certain information regarding vehicles
produced by such manufacturers that may
be eligible credits under these sections.
In addition, Revenue Procedure 2022-42
provides the procedures for sellers of new
clean vehicles or previously-owned clean
vehicles to report certain information to
the IRS and the purchasers of such clean
vehicles.
C. April 2023 Proposed Regulations
On April 17, 2023, the Treasury
Department and the IRS published the
April 2023 proposed regulations in the
Federal Register, 88 FR 23370, which
provided proposed definitions for certain
terms related to section 30D; proposed
rules regarding personal and business use
and other special rules; and additional
proposed rules related to the critical min-
eral and battery component requirements.
The deadline to submit public comments
expired on June 16, 2023.
D. Revenue Procedure 2023-33
On October 6, 2023, in addition to
filing this notice of proposed rulemak-
ing for public inspection, the Treasury
Department and the IRS released Revenue
Procedure 2023-33, which will be pub-
lished on October 23, 2023, in Internal
Revenue Bulletin 2023-43, to provide
guidance for taxpayers electing to transfer
credits under section 25E or 30D and for
eligible entities receiving advance pay-
ments of credits under sections 30D and
25E. This revenue procedure sets forth
the procedures under sections 30D(g)
and 25E(f) for the transfer of the previ-
ously-owned clean vehicle credit and the
new clean vehicle credit from the tax-
payer to an eligible entity, including the
procedures for dealer registration with
the IRS, the procedures for the revocation
and suspension of that registration, and
the establishment of an advance payment

Bulletin No. 2023–43 1149 October 23, 2023
program to eligible entities. In addition,
this revenue procedure supersedes sec-
tions 5.01 and 6.03 of Revenue Procedure
2022-42, providing new information for
the timing and manner of submission of
seller reports, respectively. This revenue
procedure also supersedes sections 6.01
and 6.02 of Revenue Procedure 2022-42,
providing updated information on submis-
sion of written agreements by manufactur-
ers to the IRS to be considered qualified
manufacturers, as well as the method of
submission of monthly reports by quali-
fied manufacturers.
Explanation of Provisions
I. Proposed Section 25E Regulations.
A. Overview
Section 25E(a) provides that, in the
case of a qualified buyer who during a
taxable year places in service a previ-
ously-owned clean vehicle, an income
tax credit is allowed for the taxable year
equal to the lesser of: (1) $4,000, or (2)
the amount equal to 30 percent of the
sale price with respect to such vehicle.
Proposed §1.25E-1(a) would state the
general rule that an income tax credit is
available under section 25E for a quali-
fied buyer of a previously-owned clean
vehicle placed in service during the
taxable year in an amount equal to the
lesser of: (1) $4,000, or (2) the amount
equal to 30 percent of the sale price
with respect to such vehicle. Proposed
§1.25E-1(b) would provide definitions
that apply for purposes of section 25E
and the proposed section 25E regu-
lations (that is, proposed §§1.25E-1
through 1.25E-3). Proposed §1.25E-1(c)
would provide rules regarding the mod-
ified adjusted gross income limitation.
Proposed §1.25E-1(d) would provide
rules regarding multiple owners of a
vehicle. Proposed §1.25E-2 would pro-
vide special rules under section 25E(e).
Proposed §1.25E-3 would provide rules
regarding the election to transfer the
25E credit under section 25E(f).
As discussed later in this Explanation
of Provisions section, the proposed rules
under section 25E also include severabil-
ity clauses and generally are proposed to
apply to taxable years beginning after the
date these regulations are published in the
Federal Register.
B. General rules for purposes of section
25E
1. Limitations on Modified Adjusted
Gross Income
Proposed §1.25E-1(c)(1) would pro-
vide, consistent with section 25E(b),
limitations based on the amount of a tax-
payer’s modified adjusted gross income,
proposing that no credit is allowed under
section 25E for any taxable year if the
lesser of the modified adjusted gross
income of the taxpayer for such taxable
year, or, the modified adjusted gross
income of the taxpayer for the preced-
ing taxable year, exceeds the threshold
amount. Proposed §1.25E-1(c)(2), consis-
tent with section 25E(b)(2), would define
the “threshold amount” as, in the case of
a joint return or a surviving spouse (as
defined in section 2(a)), $150,000; in the
case of a head of household (as defined
in section 2(b)), $112,500; and in any
other case, $75,000. Proposed §1.25E-
1(b)(3) would define “modified adjusted
gross income” as adjusted gross income
increased by any amount excluded from
gross income under sections 911, 931, or
933 of the Code. Proposed §1.25E-1(c)(3)
would provide that if the taxpayer’s filing
status for the taxable year differs from the
taxpayer’s filing status in the preceding
taxable year, the taxpayer satisfies the lim-
itation if the taxpayer’s modified AGI does
not exceed the threshold amount in either
year based on the applicable filing status
for that taxable year. This proposed rule
is consistent with proposed §1.30D-4(b)
(4) in the April 2023 proposed regulations.
2. Limitation on Multiple Owners
Proposed §1.25E-1(d)(1) would pro-
vide that the amount of the section 25E
credit attributable to a previously-owned
clean vehicle may be claimed on only one
tax return. In the event a previously-owned
clean vehicle is placed in service by mul-
tiple owners, no allocation or proration of
the section 25E credit is available. This
proposed rule is necessary because the
structure of section 25E provides for one
taxpayer to claim the section 25E credit
per vehicle placed in service. See gener-
ally section 25E(a), (c)(3), (e) (provid-
ing for rules similar to section 30D(f)(8)
and (9)) and section 6213(g)(2)(U) of the
Code. Section 25E does not contain rules
for allocation or proration of the section
25E credit with respect to a single vehicle
to multiple taxpayers placing that vehicle
in service, and such an allocation or pro-
ration would present administrative chal-
lenges. Proposed §1.25E-1(d)(2) would
provide that for seller reporting, the name
and taxpayer identification number of the
vehicle owner claiming the section 25E
credit must be listed on the seller report
pursuant to sections 25E(c)(1)(D)(i) and
30D(d)(1)(H). The credit will be allowed
only on the tax return of the owner listed
in the seller report. This proposed rule is
consistent with proposed §1.30D-4(c) in
the April 2023 proposed regulations.
C. Definitions for purposes of section 25E
1. Dealer
Proposed §1.25E-1(b)(1) would
define “dealer” by reference to the statu-
tory definition provided in section 25E(c)
(2)(A) and section 30D(g) except that the
term does not include persons licensed
solely by a territory of the United States,
and does include a dealer licensed in any
jurisdiction described in section 30D(g)
(other than one exclusively licensed in a
territory) that makes sales at sites outside
of the jurisdiction in which its licensed.
The dealer does not include persons
licensed solely by a territory because
clean vehicle credits generally are not
allowed for vehicles used predominantly
outside of the 50 States and the District
of Columbia. See sections 30D(f)(4),
25E(e), 50(b)(1), and 7701(a)(9) of the
Code. In addition, United States citizens
who are bona fide residents of U.S. terri-
tories are generally ineligible for Federal
tax credits. See sections 931, 932, 933,
and former section 935 of the Code. To
allow for flexibility, especially in the case
of direct-to-consumer sales, the proposed
definition of dealer includes a dealer
licensed in any jurisdiction described in
section 30D(g) (other than one exclu-
sively licensed in a U.S. territory) that
makes sales in jurisdictions in which it
may not be licensed.

October 23, 2023 1150 Bulletin No. 2023–43
2. Incentive
Proposed §1.25E-1(b)(2) would define
“incentive,” for purposes of the sale price
definition in proposed §1.25E-1(b)(9), as
any reduction in total sale price offered
to and accepted by a taxpayer from the
dealer or manufacturer, other than a reduc-
tion in the form of a partial payment or
down payment for the purchase of a pre-
viously-owned clean vehicle pursuant to
section 25E(f) and proposed §1.25E-3.
3. Modified Adjusted Gross Income
Proposed §1.25E-1(b)(3) would define
“modified adjusted gross income” by ref-
erence to the statutory definition provided
in section 25E(b)(3).
4. Placed in Service
Proposed §1.25E-1(b)(4) would pro-
vide that a previously-owned clean vehi-
cle is considered to be placed in service
on the date the taxpayer takes possession
of the vehicle. This proposed definition
is consistent with the meaning of “placed
in service” for purposes of other provi-
sions of the Code under which property
is considered to be “placed in service”
when the property is “placed in a condi-
tion or state of readiness and availability
for a specifically assigned function” and
as “the date on which the owner of the
vehicle took actual possession of the vehi-
cle.” See
§§ 1.46-3(d)(1)(ii) and (d)(4)
(i), 1.179-4(e), and 145.4051-1(c)(2); see
also § 1.1250-4(b)(2); Consumers Power
Co. v. Commissioner, 89 T.C. 710 (1987);
Noell v. Commissioner, 66 T.C. 718, 728–
729 (1976).
5. Previously-owned Clean Vehicle
Proposed §1.25E-1(b)(5) would define
“previously-owned clean vehicle” by ref-
erence to the statutory definition provided
in section 25E(c)(1).
6. Qualified Buyer
Proposed §1.25E-1(b)(6), consistent
with section 25E(c)(3), would define
“qualified buyer” as, with respect to a
sale of a motor vehicle, a taxpayer who is
an individual, who purchases such vehi-
cle for use and not for resale, with respect
to whom no deduction is allowable to
another taxpayer under section 151,
and who has not been allowed a section
25E credit for any sale during the 3-year
period ending on the date of the sale of
such vehicle.
7. Qualified Manufacturer
Proposed §1.25E-1(b)(7) would define
“qualified manufacturer” by reference to
section 30D(d)(3).
8. Qualified Sale
Section 25E(c)(2) defines “qualified
sale” as a sale of a motor vehicle by a dealer
(as defined in section 30D(g)(8)), for a
sale price which does not exceed $25,000,
and which is the first transfer since August
16, 2022 (the date of enactment of section
25E), to a qualified buyer other than the
person with whom the original use of such
vehicle commenced. Proposed §1.25E-
1(b)(8)(i) would define “qualified sale” as
a sale of a motor vehicle by a dealer (as
defined in proposed §1.25E-1(b)(1)) for a
sale price which does not exceed $25,000,
and which is the first transfer since August
16, 2022 (the date of enactment of section
25E), to a qualified buyer other than the
person with whom the original use of such
vehicle commenced.
9. First Transfer Rule
Proposed §1.25E-1(b)(8)(ii) would
provide the first transfer rule, which
proposes that to be a qualified sale, a
transfer must be the first transfer of the
previously-owned clean vehicle since
August 16, 2022, as shown by the vehi-
cle history of such vehicle, after the sale
to the original owner. The proposed first
transfer rule would provide certainty
that the previously-owned clean vehi-
cle is eligible for the section 25E credit,
since the dealer and taxpayer may not
otherwise know if the transfer was a
qualified sale due to the difficulties in
determining whether previous transfers
were to qualified buyers. For example,
dealers and taxpayers would not be able
to determine whether a previous trans-
fer of the vehicle as a used vehicle was
to an individual or to a taxpayer who is
not a dependent. The taxpayer would be
able to rely on the dealer’s representa-
tion of the vehicle history in determin-
ing whether the first transfer rule is
satisfied, provided the seller report is
accepted by the IRS. However, taxpay-
ers would also be encouraged to inde-
pendently examine the vehicle history to
confirm whether the first transfer rule is
satisfied, using publicly available tools.
1
For purposes of the proposed first
transfer rule, the proposed regulations
would ignore a transfer to or between
dealers. The definition of qualified sale
in section 25E(c)(2) requires that a sale
must be by a dealer to an individual for
the buyer to be able to claim the sec-
tion 25E credit. If a transfer to a dealer
were taken into account as a transfer,
the vast majority of eligible vehicles
would never qualify for the section 25E
credit because a dealer (itself ineligible
for the credit) selling a used vehicle will
have acquired the vehicle from the prior
owner (for example, as a trade-in) before
selling the vehicle as a used vehicle.
Treating transfers to dealers as a transfer
would thus frustrate Congress’s purpose
in enacting section 25E. In addition,
the Treasury Department and the IRS
understand that transfers between deal-
ers generally do not result in a change
of title that would appear on a vehicle
history. Accordingly, selling or trading
in a vehicle to a dealer for resale should
not disqualify the vehicle for purposes
of the first transfer rule.
Examples illustrating the first transfer
rule are provided in proposed §1.25E-1(e).
10. Sale Price
Proposed §1.25E-1(b)(9) would
define the “sale price” of a previous-
ly-owned clean vehicle as the total sale
price agreed upon by the buyer and
dealer in a written contract at the time
of sale, including any delivery charges
1
A list of approved National Motor Vehicle Title Information System data providers can be found at: vehiclehistory.bja.ojp.gov/nmvtis_vehiclehistory.

Bulletin No. 2023–43 1151 October 23, 2023
and after the application of any incen-
tives, but excluding separately-stated
taxes and fees required by law. The sale
price of a previously-owned clean vehi-
cle is determined before the application
of any trade-in value. This proposed defi-
nition of sale price would include fees
and charges imposed by the dealer to pre-
vent dealers from allocating a portion of
the price of the previously-owned clean
vehicle to separately stated fees (other
than those required by law) and charges
to avoid the $25,000 sales price cap in
section 25E(c)(2)(B). This proposed defi-
nition does not include separate financ-
ing, extended warranties, insurance, or
maintenance service charges.
11. Section 25E Regulations
Proposed §1.25E-1(b)(10) would
define “section 25E regulations” to
mean proposed §§1.25E-1, 1.25E-2, and
1.25E-3.
12. Seller Report
Proposed §1.25E-1(b)(11) would
define “seller report” as the report
described in section 25E(c)(1)(D)(i) by
reference to section 30D(d)(1)(H) and
provided by the dealer of a vehicle to
the taxpayer and the IRS in the manner
provided in, and containing the infor-
mation described in Revenue Procedure
2023-33. Seller reports must be pro-
vided to the IRS electronically. See sec-
tion II of this Explanation of Provisions
for a more detailed discussion of this
definition.
II. Section 1.30D-2 Definitions
As noted in part II.C of the Background
section, the April 2023 proposed regula-
tions provided, in relevant part, definitions
that apply for purposes of section 30D and
the section 30D regulations. These pro-
posed regulations would modify proposed
§1.30D-2 by adding paragraph (j), which
proposes a definition for seller report.
Sections 5 and 6 of Revenue Procedure
2022-42 provided initial procedures for
sellers of vehicles to provide seller reports
to the IRS.
Proposed §1.30D-2(j) would define
a “seller report” as the report described
in section 30D(d)(1)(H) (which section
25E(c)(1)(D)(i) cross references as part of
the definition of a previously-owned clean
vehicle) that is provided by the seller of a
vehicle to the taxpayer and the IRS. The
seller report must be provided to the IRS
electronically, and the additional time
and manner procedures for providing the
seller report, as well as the information
that must be included in the seller report,
is contained in Revenue Procedure 2023-
33, which will supersede relevant portions
of Revenue Procedure 2022-42.
III. Special Rules that Apply for Purposes
of Section 25E and Section 30D
A. In general
As noted in section II.C of the
Background section of this preamble, the
April 2023 proposed regulations provided
guidance regarding the special rules under
section 30D(f). See proposed §1.30D-4
of the April 2023 proposed regulations.
These proposed regulations add provi-
sions to those special rules that are rele-
vant to recapture of the section 25E credit
and the section 30D credit. These pro-
posed regulations also add special rules
relevant to section 25E. These proposed
regulations are accompanied by Revenue
Procedure 2023-33.
B. No double benefit rule
Proposed §1.25E-2(b)(1) would pro-
vide that for purposes of sections 25E(e)
and 30D(f)(2), the amount of any deduc-
tion or other credit allowable under chap-
ter 1 of the Code for a vehicle for which
a section 25E credit is allowable must be
reduced by the amount of the section 25E
credit allowed for such vehicle. Proposed
§1.25E-2(b)(2) would provide rules for the
interaction of sections 30D and section 25E
and provide that a section 30D credit that
has been allowed with respect to a vehicle
in a taxable year before the year in which a
section 25E credit is allowable for that vehi-
cle does not reduce the amount allowable
under section 25E. Accordingly, a taxpayer
who otherwise satisfies the requirements of
section 25E would be eligible to claim the
section 25E credit for a vehicle for which
another taxpayer previously claimed the
section 30D credit.
C. Recapture of the section 25E credit or
the section 30D credit
Section 25E(e) provides that, for pur-
poses of section 25E, rules similar to the
rules of section 30D(f) apply. Section
30D(f)(5) instructs the Secretary to pro-
vide regulations for recapturing the ben-
efit of any section 30D credit with respect
to any property that ceases to be eligible
for the section 30D credit. Thus, proposed
§§1.25E-2(c) and 1.30D-4(d) would pro-
vide corresponding rules under section
30D(f)(5) for cancelled sales, returns, and
resales of the vehicle. Because the rules
proposed under each section generally are
the same, with the exception of references
to the clean vehicle credit applicable to
the section (that is, the section 25E credit
under proposed §1.25E-2(c) and the sec-
tion 30D credit under proposed §1.30D-
4(d)), the discussion in section III.D.1
through III.D.3 of this Explanation of
Provisions, unless otherwise noted, refers
to a “clean vehicle credit” to denote the
credit under section 25E and section 30D.
1. Cancelled Sale
Proposed §§1.25E-2(c)(1)(i) and
1.30D-4(d)(1)(i) would provide the
Federal income tax consequences that
apply if the sale of a vehicle between the
taxpayer and seller is cancelled before the
taxpayer places the vehicle in service (that
is, before the taxpayer takes possession
of the vehicle). Specifically, in the case
of a cancelled sale, the taxpayer may not
claim a clean vehicle credit with respect
to the vehicle. The vehicle will still be
eligible for a clean vehicle credit upon a
subsequent qualifying sale to another tax-
payer because the vehicle was not placed
in service as part of the prior cancelled
sale. Additionally, the seller report (as
defined in proposed §§1.25E-1(b)(11)
and 1.30D-2(j) and described in part II of
this Explanation of Provisions), if already
submitted, must be rescinded by the seller
pursuant to the procedures in the pro-
cedural guidance published in Revenue
Procedure 2023-33. Finally, because the
taxpayer is not eligible for the credit, no
vehicle transfer election is available under
the clean vehicle credit transfer rules
described in section IV of this Explanation
of Provisions.

October 23, 2023 1152 Bulletin No. 2023–43
2. Vehicle Returns
Proposed §§1.25E-2(c)(1)(ii) and
1.30D-4(d)(1)(ii) would provide the
Federal income tax consequences that
apply if the taxpayer returns the vehicle
to the seller within 30 days of placing the
vehicle in service. Specifically, in the case
of such return, the taxpayer cannot claim
a clean vehicle credit with respect to the
vehicle. The Treasury Department and the
IRS understand that vehicle retailers may
have return policies that range from sev-
eral days up to 30 days, so the proposed
rules regarding returns within 30 days
reflect industry practice.
In the case of a return within 30 days of
what was a new clean vehicle, the vehicle,
once returned, already was placed in service
by the taxpayer and therefore is not avail-
able for original use by another taxpayer.
Because section 30D(d)(1)(A) requires that
original use of a new clean vehicle com-
mence with the taxpayer, for purposes of
section 30D, the returned vehicle is not
eligible for the section 30D credit upon a
subsequent sale. In the case of a return of a
previously-owned clean vehicle, the vehi-
cle, once returned, is not eligible for the
section 25E credit upon a subsequent sale
if the vehicle history reflects that the prior
sale and return was a qualified sale per sec-
tion 25E(c)(2)(C). However, if the vehicle
history does not reflect the prior sale and
return, the vehicle remains eligible for the
section 25E credit under the first transfer
rule described in proposed §1.25E-1(b)(8)
(ii). The seller report, in the case of a return,
must be updated by the seller to reflect the
return pursuant to the procedures published
in Revenue Procedure 2023-33. Finally, if
the taxpayer made an election to transfer
the clean vehicle credit, that vehicle trans-
fer election is nullified, and any advance
payment made pursuant to the clean vehi-
cle transfer rules will be recaptured from
the eligible entity as an excessive payment.
See section IV.E.1 of this Explanation
of Provisions for a discussion of the
excessive payment rules described in the
preceding paragraph.
3. Resales
Proposed §§1.25E-2(c)(1)(iii) and
1.30D-4(d)(1)(iii) would treat the taxpayer
as having purchased the vehicle with an
intent to resell such vehicle if the resale
occurs within 30 days of the taxpayer plac-
ing the vehicle in service. Section 30D(d)(1)
(B) provides that a new clean vehicle must
be acquired for use or lease by the taxpayer
and not for resale, and section 25E(c)(3)
(B) defines a qualified buyer as purchasing
the vehicle for use and not for resale. The
Treasury Department and the IRS propose
that a resale within 30 days is a sufficiently
short period of time to presume that the pur-
chase was done with the intent to resell. As a
result, in such a case the taxpayer who pur-
chased the new clean vehicle and resold it
within 30 days may not claim a clean vehi-
cle credit with respect to the vehicle.
In the case of a resale by the taxpayer
within 30 days of what was a new clean
vehicle, the vehicle, once placed in service
for use by the taxpayer, is not considered
available for original use by another tax-
payer for purposes of section 30D, so the
vehicle is not eligible for the section 30D
credit upon a subsequent sale. In the case of
a resale by the taxpayer within 30 days of
what was a previously-owned clean vehicle,
the vehicle, once placed in service for use
by the taxpayer, is not eligible for the sec-
tion 25E credit upon a subsequent sale. In
the case of a resale of such vehicle, however,
the seller report is not required to be updated
because the seller may not have knowledge
of the subsequent resale. Finally, if the tax-
payer made an election to transfer the clean
vehicle credit, that vehicle transfer election
remains in effect and the value of any trans-
ferred credit pursuant to the clean vehicle
transfer rules will be recaptured from the
taxpayer (as opposed to the advance pay-
ment being collected from the eligible entity
as an excessive payment, since the eligible
entity is not a party to the subsequent resale).
See section IV.E.2 of this Explanation
of Provisions for a discussion of the exces-
sive payment rules of proposed §§1.25E-
3(g)(2) and 1.30D-5(f)(2) described in the
preceding paragraph.
4. Other Returns or Resales
Proposed §§1.25E-2(c)(1)(iv) and
1.30D-4(d)(iv) would provide a rule for
returns or resales not described in sec-
tion III.D.2 and 3 of this Explanation of
Provisions (that is, returns or resales occur-
ring more than 30 days after the date on
which the taxpayer places the vehicle in
service). Generally, taxpayers returning
or reselling a clean vehicle more than 30
days after the date the taxpayer places in
service will remain eligible for the section
30D or section 25E credit for the purchase
of such vehicle. The proposed regulations
would provide that, in the case of what was
a new clean vehicle before the return or
resale, the vehicle, once returned or resold,
is not available for original use by another
taxpayer and, therefore, is not eligible for a
section 30D credit. Similarly, in the case of
what was a previously-owned clean vehi-
cle before the return or resale, the vehicle,
once returned or resold, generally is not
eligible for the section 25E credit upon a
subsequent sale pursuant to the first trans-
fer rule described in proposed §1.25E-1(b)
(8)(ii). In the case of return occurring more
than 30 days after the date on which the
taxpayer places the vehicle in service, the
seller report is not required to be updated
because the taxpayer generally will be
eligible for the clean vehicle credit in this
circumstance. In addition, in the case of
a resale of such vehicle, the seller report
is not required to be updated because the
seller would not have knowledge of the
subsequent resale. Finally, if the taxpayer
made an election to transfer the clean vehi-
cle credit, that vehicle transfer election
remains in effect and the value of any trans-
ferred credit pursuant to the clean vehicle
transfer rules generally is not subject to
recapture or excessive payment.
Although the proposed regulations
would not provide an automatic clean
vehicle credit recapture rule for returns or
resales more than 30 days after a return or
resale, the IRS may determine upon facts
and circumstances that a clean vehicle
was purchased with the intent to return or
resell and may disallow the clean vehicle
credit in such cases.
The Treasury Department and the IRS
request comments as to whether 30 days
is the appropriate length of time for the
return rule in proposed §§1.25E-2(c)(1)
(ii) and 1.30D-4(d)(1)(ii) and the resale
rule in proposed §§1.25E-2(c)(1)(iii) and
1.30D-4(d)(1)(iii).
D. Branded title rule
Proposed §1.25E-2(d) would provide
that a title to a previously-owned clean
vehicle indicating that such vehicle has

Bulletin No. 2023–43 1153 October 23, 2023
been damaged or is otherwise a branded
title does not impact the vehicle’s eligibil-
ity for a section 25E credit.
E. Seller registration
In general, to be eligible for the section
25E credit and the section 30D credit, a
clean vehicle must be accompanied by a
seller report. See sections 30D(d)(1)(H)
and 25E(c)(1)(D)(i). Proposed §§1.25E-
2(e) and 1.30D-4(g) would provide that the
seller must register with the IRS in the man-
ner set forth in Revenue Procedure 2023-33
for purposes of filing seller reports.
F. Requirement to file a complete income
tax return
As discussed in the April 2023 proposed
regulations and in these regulations, a tax-
payer will continue to use Form 8936, now
titled Clean Vehicle Credits, to claim the
section 25E or 30D credit, regardless of
whether the taxpayer transfers the credit to
the dealer. The IRS cannot properly moni-
tor claims of these credits if taxpayers do
not include a completed Form 8936 with
their individual income tax returns. Section
6213(g)(2)(D) defines a “mathematical or
clerical error” for purposes of math error
authority, to include an omission of infor-
mation which is required to be supplied on
the return to substantiate an entry on the
return. To ensure that the IRS can appro-
priately monitor these credits, proposed
§§1.25E-2(f) and 1.30D-4(h) would clarify
that taxpayers must file an income tax return
for the taxable year in which the clean vehi-
cle is placed in service to be entitled to the
credit under section 25E or 30D. For this
purpose, an income tax return is defined as
a Form 1040, U.S. Individual Income Tax
Return, with an attached Form 8936, Clean
Vehicle Credits, or successor form, and any
additional forms, schedules, or statements
prescribed by the Commissioner for the
purpose of making a return to report the
tax under chapter 1 that includes all of the
information required on the forms and in
instructions.
IV. Transfer Rules for the Section 25E
Credit and the Section 30D Credit
Section 30D(g), as noted in more detail in
section I.A of the Background section of this
preamble, generally establishes a set of rules
under which a taxpayer may transfer a sec-
tion 30D credit to certain dealers, referred to
as eligible entities, in which case the eligible
entity (and not the taxpayer) is allowed the
section 30D credit and in exchange the eligi-
ble entity must pay the taxpayer an amount
equal to the transferred section 30D credit
(with such payment being made either in
cash or in the form of a partial payment or
down payment for the purchase of the vehi-
cle). Section 25E(f) provides that, for pur-
poses of section 25E, rules similar to the
rules of section 30D(g) apply.
The proposed regulations described
in this section IV of the Explanation of
Provisions are designed in part to ensure
program integrity. Advance payment of
the section 30D and section 25E cred-
its poses unique compliance challenges,
since such advance payments are not sub-
ject to the same tax administration proce-
dures that apply to claiming a credit via
return filing. Furthermore, participation in
the credit transfer and advance payment
program is optional. The transfer of the
section 30D and 25E credits is elective on
the part of the taxpayer, and the eligible
entity can decide whether to offer to the
taxpayer the ability to transfer such credits
(thereby participating in the advance pay-
ment program). Taxpayers instead may
choose to wait and claim a section 30D
or section 25E credit on the taxpayer’s
return. Section 30D(g)(1) provides that
a taxpayer election to transfer the 30D
credit is subject to the regulations or other
guidance that the Secretary determines
necessary. Section 30D(g)(7) instructs the
Secretary to establish a program for mak-
ing advance payments to eligible entities
– that is, payments made by the IRS to the
eligible entity before the eligible entity
files its Federal income tax return for
the relevant taxable year. Taken together,
these provisions provide authority for the
Secretary to establish the parameters and
conditions of the transfer election and the
accompanying advance payment program
for those taxpayers and eligible entities
that choose to participate, in furtherance
of sound tax administration.
Proposed §§1.25E-3 and 1.30D-5
would provide transfer rules under these
provisions (section 30D(g) and sec-
tion 25E(f) by cross reference to sec-
tion 30D(g)), including by establishing
an advance payment program for such
transfers. Because the rules proposed
under each section are the same, with the
exception of references to the clean vehi-
cle credit applicable to the section (that
is, the section 25E credit under proposed
§1.25E-3 and the section 30D credit under
proposed §1.30D-5), the discussion in sec-
tion IV of this Explanation of Provisions,
unless otherwise noted, refers to a “clean
vehicle credit” to denote the credit under
section 25E and section 30D.
The rules below do not specifically
address the requirements, under section
30D(g)(2)(B)(ii) and (D), relating to the dis-
closure by the dealer of other incentives and
the requirement that the dealer ensures that
the availability or use of such other incen-
tives do not limit the ability of a taxpayer to
make a vehicle transfer election, and such
election does not limit the value or use of
such incentives. The Treasury Department
and the IRS request comments as what guid-
ance, if any, should be given here.
A. Definitions that apply for purposes of
the transfer rules
Proposed §§1.25E-3(b) and 1.30D-
5(a) would provide definitions that apply
for purposes of the transfers of a clean
vehicle credit. The definitions described
in this section IV.A of the Explanation of
Provisions apply to both proposed §1.25E-
3(b) and proposed §1.30D-5(a).
1. Advance Payment Program
Proposed regulations 1.25E-3(b)(1)
and 1.30D-5(a)(1) would define “’advance
payment program” as the program
described in section 30D(g)(7) (and sec-
tion 25E(f) by cross reference to section
30D(g)) and these proposed regulations
under which an eligible entity may receive
an advance payment from the Treasury
Department in the case of a vehicle trans-
fer election made by an electing taxpayer.
The advance payment program represents
the exclusive means by which an eligi-
ble entity may receive a transferred clean
vehicle credit.
2. Dealer
Dealer for purposes of the transfer
rules in proposed §§1.25E-3(b)(2) and

October 23, 2023 1154 Bulletin No. 2023–43
1.30D-(a)(2) has the same meaning as that
in proposed §1.25E-1(b)(1) and described
in section I.C.1 of this Explanation of
Provisions.
3. Dealer Tax Compliance
Dealer tax compliance means that
all required Federal information and tax
returns of the dealer have been filed,
including for Federal income and employ-
ment tax, and the dealer has paid all
Federal tax, penalties, and interest due of
the dealer at the time of sale. In the case
of an installment agreement, the proposed
regulations clarify that a dealer is in dealer
tax compliance if the dealer is current
on its obligations under that installment
agreement. See proposed §§1.25E-3(b)(2)
and 1.30D-5(a)(3).
4. Electing Taxpayer
Electing taxpayer means the individ-
ual that purchases and places in service a
clean vehicle and that elects to transfer a
clean vehicle credit associated with that
vehicle that would otherwise be allowable
to that individual. To be an electing tax-
payer, the individual must make certain
attestations regarding anticipated eligibil-
ity for the credit to a registered dealer as
provided in Revenue Procedure 2023-33.
See proposed §§1.25E-3(b)(3) and 1.30D-
5(a)(4). For example, the electing tax-
payer must make an attestation regarding
satisfaction of the modified adjusted gross
income limitations for the clean vehicle
credit. In addition, for purposes of section
30D, the electing taxpayer must attest to
the registered dealer that it plans to use
the vehicle predominantly for personal
use. Id. Because the election to transfer
a credit under section 30D(g) is limited
to the credit allowable under subsection
30D, a taxpayer may not elect to transfer
a general business credit for a new clean
vehicle allowable under section 38 instead
of section 30D, pursuant to section 30D(c)
(1). As described in proposed §1.30D-
1(b)(1) of the April 2023 proposed reg-
ulations, a depreciable vehicle the use of
which is 50 percent or more business use
in the taxable year the vehicle is placed in
service is not apportioned between section
38 and section 30D, but instead is credit-
able entirely under section 38 as a general
business credit. Thus, the use of a new
clean vehicle must be predominantly per-
sonal for a taxpayer to be able to make the
election to transfer the credit under sec-
tion 30D(g). These attestations will help
prevent a transfer of the credit for which
the taxpayer is ineligible, and therefore
will reduce instances of recapture.
5. Eligible Entity
Eligible entity means a registered
dealer that meets certain requirements and,
by reason of meeting those requirements,
is eligible to receive advance payments
from the IRS under the advance payment
program. See proposed §§1.25E-3(b)(4)
and 1.30D-5(a)(5). The requirements the
eligible entity must meet are described
in section IV.D of this Explanation of
Provisions.
6. Registered Dealer
Registered dealer refers to a dealer that
has completed the registration described
in proposed §§1.25E-3(c) and 1.30D-5(b)
and section IV.B of this Explanation of
Provisions. See proposed §§1.25E-3(b)(5)
and 1.30D-5(a)(6).
7. Time of Sale
Time of sale means the date the clean
vehicle is placed in service. The date the
clean vehicle is placed in service is the
date the taxpayer takes possession of
the vehicle. See proposed §§1.25E-3(b)
(6) and 1.30D-5(a)(7); see also proposed
§1.30D-2(e) of the April 2023 proposed
regulations for the definition of placed in
service.
B. Dealer registration and taxpayer
election
1. Dealer Registration
Proposed §§1.25E-3(c)(1) and 1.30D-
5(b)(1) would provide that, before being
eligible to participate in the advance
payment program and receive transfers
of clean vehicle credits from an electing
taxpayer, a dealer must register (thereby
becoming a registered dealer). The dealer
will register in the manner set forth in
Revenue Procedure 2023-33.
Proposed §§1.25E-3(c)(2) and 1.30D-
5(b)(2) would provide rules regarding
dealer tax compliance. Specifically, if the
dealer is not in dealer tax compliance for
any of the taxable periods during the most
recent five taxable years, the dealer may
register to become a registered dealer,
but the dealer cannot receive advance
payments under the advance payment
program until the dealer tax compliance
issue is resolved. In such case, the dealer,
while registered, is not an eligible entity
until it comes into dealer tax compliance.
Relevant procedural guidance regarding
dealer tax compliance will be published in
the Internal Revenue Bulletin.
Pursuant to section 30D(g)(1) and (g)
(7), participation in the advance pay-
ment program is elective and is sub-
ject to the requirements and conditions
that the Secretary determines necessary.
Requiring registration of a dealer before
it may participate in the advance payment
program ensures that only entities that are
valid, licensed vehicle dealers are eligi-
ble to receive advance payments of the
transferred credits. In addition, requiring
dealer tax compliance ensures that entities
receiving advance payments are current
on their Federal tax obligations. Taken
together, these requirements help ensure
that only compliant, registered dealers
receive the benefit of the elective advance
payment program by preventing fraud and
ensuring sound tax administration.
2. Vehicle Transfer Election
For clean vehicles placed in service
after December 31, 2023, the proposed
regulations would provide that an elect-
ing taxpayer may make an election to
transfer a clean vehicle credit otherwise
allowable to the electing taxpayer to an
eligible entity pursuant to a vehicle trans-
fer election. See proposed §§1.25E-3(d)
and 1.30D-5(c). The vehicle transfer elec-
tion is made by the electing taxpayer no
later than at the time of sale pursuant to
Revenue Procedure 2023-33, and, once
made, the vehicle transfer election is irre-
vocable. To make a valid vehicle transfer
election, the electing taxpayer must trans-
fer the entire amount of the clean vehicle
credit otherwise allowable to it and, in
exchange for the transferred clean vehi-
cle credit, the eligible entity must pay the

Bulletin No. 2023–43 1155 October 23, 2023
electing taxpayer an amount equal to the
clean vehicle credit included in the vehicle
transfer election or treat the credit amount
as a down payment or partial payment.
C. Federal income tax consequences of
the vehicle transfer election
1. Treatment of Electing Taxpayer
Proposed §§1.25E-3(e)(1) and 1.30D-
5(d)(1) would provide the Federal income
tax treatment of a vehicle transfer election
as to an electing taxpayer. Specifically,
the proposed regulations provide that
the amount of the clean vehicle credit
an electing taxpayer may transfer as part
of a vehicle transfer election can exceed
the electing taxpayer’s regular tax liabil-
ity (as defined in section 26(b)(1) of the
Code) for the taxable year in which the
sale occurs, and the excess amount, if any,
generally is not subject to recapture unless
recapture pursuant to section 30D(f)(5) or
(g)(10) applies. In addition, the payment
made (whether in cash or in the form of
a partial payment or down payment for
the purchase of such vehicle) by the eli-
gible entity to the electing taxpayer is not
includible in the electing taxpayer’s gross
income for the taxable year. Finally, to
ensure appropriate application of the basis
reduction rule in section 30D(f)(1) (and
section 25E(e) by cross reference to sec-
tion 30D(f)(1)), the proposed regulations
would provide that the payment described
in the preceding sentence is treated as
repaid by the electing taxpayer to the eli-
gible entity as part of the purchase price
of the vehicle.
2. Treatment of Eligible Entity
Proposed §§1.25E-3(e)(2) and 1.30D-
5(d)(2) would provide the Federal income
tax treatment of a vehicle transfer election
as to an eligible entity. Specifically, the
eligible entity may receive as an advance
payment from the Treasury Department
the amount of the clean vehicle credit
transferred to the eligible entity as part of
a vehicle transfer election, which is not
includible in the eligible entity’s gross
income for the taxable year in which such
payment is received or accrued, as appro-
priate, and such payment may exceed the
eligible entity’s regular tax liability (as
defined in section 26(b)(1)) for such tax-
able year and generally is not subject to
recapture unless the excessive payment
rules apply. The eligible entity may not
deduct the payment made to the electing
taxpayer, and, consistent with the treat-
ment as to the electing taxpayer described
in section IV.C.1 of this Explanation of
Provisions, the electing taxpayer is treated
as paying the eligible entity the amount
of the transferred clean vehicle credit as
part of the purchase price of the clean
vehicle. The amount of this payment by
the electing taxpayer is treated as part of
the amount realized by the eligible entity
under section 1001 from the sale of the
clean vehicle.
The proposed regulations would pro-
vide special rules in the case of an eli-
gible entity that is a partnership or an S
corporation. See proposed §§1.25E-3(e)
(2)(vi) and 1.30D-5(d)(2)(vi). Because
the electing taxpayer is treated as paying
the eligible entity the amount of the trans-
ferred clean vehicle credit as part of the
purchase price of the clean vehicle and
the amount of this payment is treated as
part of the amount realized by the eligi-
ble entity under section 1001 from the
sale of the clean vehicle, the advance pay-
ment is not treated as tax exempt income
to the partnership or S corporation for
purposes of the Code. These rules would
ensure proper basis and capital accounting
reporting for advance payments received
by partnerships and S corporations and
parity in Federal tax treatment regardless
of the form through which the eligible
entity conducts its business.
3. Other Rules
Proposed §§1.25E-3(e)(3) and 1.30D-
5(d)(3) would provide that the Federal
income tax treatment of the payments
associated with a vehicle transfer election
are the same regardless of whether the
payment is made in cash or in the form of
a partial payment or down payment for the
purchase of the clean vehicle. Additionally,
proposed §§1.25E-3(e)(4) and 1.30D-5(d)
(4) would describe the additional rules
that apply by reason of a vehicle transfer
election (that is, section 30D(f)(1) and (f)
(2), section 30D(f)(6), and section 30D(f)
(9), including with respect to the section
25E proposed regulations by reason of the
cross reference to section 30D(g) in sec-
tion 25E(f)).
Proposed §1.30D-5(d)(5) would pro-
vide examples demonstrating the Federal
income tax treatment of a vehicle transfer
election.
D. Advance payment program
As noted earlier in this section, the
advance payment program allows an eli-
gible entity to receive payments from the
IRS corresponding to the amount of the
clean vehicle credit for which a vehicle
transfer election was made before the eli-
gible entity files its Federal income tax
return for the taxable year with respect
to which the vehicle transfer election
relates. See proposed §§1.25E-3(f) and
1.30D-5(e). To qualify for the advance
payment program, a registered dealer
(that is, a dealer that meets the registra-
tion requirements described in section
IV.B of this Explanation of Provisions),
must meet additional requirements to be
an eligible entity. Those requirements
are that the registered dealer must submit
additional registration information and be
in dealer tax compliance, the registered
dealer must retain information related to
the vehicle transfer election for the period
specified in the proposed regulations, and
the registered dealer must meet any other
requirements provided in procedural guid-
ance published in the Internal Revenue
Bulletin.
The proposed regulations would also
refer to suspension and revocation pro-
cedures identified in Revenue Procedure
2023-33. See proposed §§1.25E-3(f)
(3) and (4) and 1.30D-5(e)(3) and (4).
Section 7803(e)(3) provides it is the
function of the IRS Independent Office
of Appeals (Appeals) to resolve Federal
tax controversies without litigation.
Decisions made by the IRS relating to
the suspension or revocation of a dealer’s
registration are not Federal tax contro-
versies within the meaning of the sec-
tion 7803(e)(3) because registration is
too attenuated and separate from any tax
liability of the registering dealer. These
registration-related decisions would have
no direct effect on the amount of a deal-
er’s tax liability and likely would only
affect the source of the dealer’s income.
For example, a dealer’s ability to benefit

October 23, 2023 1156 Bulletin No. 2023–43
from sections 30D(g) or 25E(f) is predi-
cated on registration, a buyer purchasing
the eligible clean vehicle, and a buyer
making an election to transfer the credit
under sections 30D(g) or 25E(f). Only
upon those three events would the reg-
istration affect the dealer’s tax liability.
Accordingly, proposed §§ 1.25E-3(f)(3)
and (4) and 1.30D-5(e)(3) and (4) would
provide that a dealer could not adminis-
tratively appeal the IRS’s decisions relat-
ing to the suspension or revocation of a
dealer’s registration unless the IRS and
the IRS Independent Office of Appeals
agree that such review is available and
the IRS provides the time and manner for
such review.
E. Increases in tax
1. Recapture from Taxpayer
As noted in section I of the
Background section of this preamble,
section 30D(g)(10) provides that, in the
case of any taxpayer who has made an
election described in section 30D(g)(1)
with respect to a new clean vehicle and
received a payment described in section
30D(g)(2)(C) from an eligible entity,
if the credit under section 30D would
otherwise (but for section 30D(g)) not
be allowable to such taxpayer pursuant
to the application of section 30D(f)(10)
(relating to the modified adjusted gross
income limitation), the tax imposed on
such taxpayer under chapter 1 for the
taxable year in which such vehicle was
placed in service will be increased by the
amount of the payment received by such
taxpayer. Because of the section 25E(f)
cross reference to section 30D(g), simi-
lar rules will apply for previously-owned
clean vehicles.
Proposed §§1.25E-3(g)(1) and 1.30D-
5(f)(1) would provide that, in the case of
a clean vehicle credit that would other-
wise not be allowable to a taxpayer that
made a vehicle transfer election because
the taxpayer exceeds the limitation based
on modified adjusted gross income, the
income tax imposed on the taxpayer under
chapter 1 for the taxable year in which the
vehicle was placed in service is increased
by the amount of the payment received
by the taxpayer pursuant to the vehicle
transfer election. The taxpayer in such a
case must reconcile the amounts on its tax
return for the taxable year.
2. Excessive Payment as to Eligible
Entity
As noted in section I of the Background
section of this preamble, section 30D(g)
(7)(B) (and section 25E(f) by cross refer-
ence to section 30D(g)) provides that rules
similar to the rules of section 6417(d)(6)
apply for purposes of the advance pay-
ment program. Proposed §§1.25E-3(g)(2)
and 1.30D-5(f)(2) would provide that, in
the case of any advance payment that the
IRS determines constitutes an excessive
payment, the tax imposed on the eligible
entity by chapter 1, regardless of whether
such entity would otherwise be subject
to chapter 1 tax, for the taxable year in
which such determination is made will be
increased by the sum of the amount of the
excessive payment, plus an amount equal
to 20 percent of such excessive payment.
The latter amount, however, will not apply
if the eligible entity demonstrates to the
IRS that the excessive payment was due
to reasonable cause, which is presumed
to be the case for a clean vehicle returned
within 30 days of placing such vehicle in
service. See proposed §§1.25E-3(g)(2)(ii)
and 1.30D-5(f)(2)(ii).
The proposed regulations would pro-
vide that an excessive payment means,
with respect to an advance payment to an
eligible entity pursuant to a vehicle trans-
fer election made by an electing taxpayer,
an advance payment made to a registered
dealer that fails to meet the requirements
to be an eligible entity, or to an eligible
entity with respect to a clean vehicle to the
extent the payment exceeds the amount of
the clean vehicle credit that would be oth-
erwise allowable to the electing taxpayer
with respect to the vehicle. See proposed
§§1.25E-3(g)(2)(iii) and 1.30D-5(f)(2)
(iii). However, any excess attributable to
a taxpayer exceeding the limitation based
on modified adjusted gross income is not
treated as an excessive payment to an eli-
gible entity.
F. Requirement to file return
Proposed §§1.25E-3(h) and 1.30D-5(g)
would provide that an electing taxpayer
must file an income tax return for the
taxable year in which the vehicle transfer
election is made that reports such election.
Specifically, the electing taxpayer must
file a Form 1040, U.S. Individual Income
Tax Return, with an attached Form 8936,
Clean Vehicle Credits, or successor form,
and any other additional forms, sched-
ules, or statements prescribed by the
Commissioner for purposes of making a
return to report tax under chapter 1. The
electing taxpayer must include the VIN
of the clean vehicle on the return of tax
for the taxable year in which the vehicle
transfer election is made, as provided for
in forms and instructions.
G. Two vehicle transfer elections per
year.
Proposed §§1.25E-3(i) and 1.30D-
5(h) would provide that a taxpayer may
make no more than two transfer elections
per taxable year, consisting of elections
either for two section 30D credits or for
one section 30D credit and one section
25E credit. In the case of a joint return,
each spouse may make two transfer
elections per taxable year, for a maxi-
mum of four vehicle transfer elections
in a taxable year. This proposed rule is
intended to ensure program integrity
by limiting transfer elections to vehicle
sales that appear to be for legitimate per-
sonal or individual use. The section 30D
credit may only be transferred for clean
vehicles that are for predominantly per-
sonal use, and a taxpayer transferring
the section 25E credit must be an indi-
vidual. Moreover, a qualified buyer of a
previously-owned clean vehicle for the
section 25E credit must not have been
allowed a prior section 25E credit for a
sale in the prior three years. The Treasury
Department and the IRS believe that it is
unlikely that an individual who meets the
modified adjusted gross income limita-
tions would purchase more than two clean
vehicles in a taxable year for legitimate
personal or individual use. Accordingly,
in light of the unique compliance chal-
lenges posed by advance payments of the
section 30D and section 25E credits and
pursuant to the broad authority conferred
by section 30D(g)(1) and section 25E(f),
the proposed regulations would limit tax-
payers to two vehicle transfer elections in
a taxable year.

Bulletin No. 2023–43 1157 October 23, 2023
V. Proposed Regulations Under Section
6213(g)(2)
A. Omission of a correct vehicle
identification number
The IRA added three new definitions to
the exclusive list of “mathematical or cleri-
cal errors” in section 6213(g)(2). These new
definitions are set out in sections 6213(g)
(2)(T), (U), and (V). Section 6213(g)(2)
(T) provides that the term “mathemati-
cal or clerical error” means an omission
of a correct VIN required under section
30D(f)(9) (relating to credit for new clean
vehicles) to be included on a return; sec-
tion 6213(g)(2)(U) provides that the term
“mathematical or clerical error” means an
omission of a correct VIN required under
section 25E(d) (relating to credit for previ-
ously-owned clean vehicles) to be included
on a return; and section 6213(g)(2)(V) pro-
vides that the term “mathematical or cleri-
cal error” means an omission of a correct
VIN required under section 45W(e) (relat-
ing to commercial clean vehicle credit) to
be included on a return.
The flush language added by Congress
in 1998 to clarify the meaning of a correct
TIN does not provide the clarification that
is necessary to determine the meaning of
“an omission of a correct vehicle identifi-
cation number” under sections 6213(g)(2)
(T) through (V). Accordingly, proposed
§301.6213-2 would provide rules for
determining when the IRS is authorized to
use math error authority to make a sum-
mary assessment when there has been an
“omission of a correct vehicle identifica-
tion number” on a taxpayer’s return when
claiming or electing to transfer the credits
under sections 30D, 25E and 45W.
Proposed §301.6213-2 would describe
when taxpayers will be treated as hav-
ing omitted a correct VIN required to be
included on a taxpayer’s return under sec-
tion 30D, section 25E, and section 45W.
Under proposed §301.6213-2(b), a tax-
payer would be treated as having omitted
a correct VIN (1) when the VIN required
to be reported under section 30D(f)(9),
25E(d), or 45W(e) is not included on the
tax return; (2) when the VIN required
to be reported under section 30D(f)(9),
25E(d), or 45W(e) is included on the tax
return but is not a VIN for an eligible vehi-
cle under section 30D(d)(1), 25E(c)(1), or
45W(c); (3) when the VIN required to be
reported under section 30D(f)(9), 25E(d),
or 45W(e) is included on the tax return
but the taxpayer claims the credit for a
year in which the vehicle is not eligible
for the credit; (4) when the VIN required
to be reported under section 30D(f)(9) is
included on the tax return but differs from
the VIN reported to the Secretary under
section 30D(d)(1)(H) for the taxpayer
who was issued the report; and (5) when
the VIN required to be reported under sec-
tion 25E(d) is included on the tax return
but differs from the VIN reported to the
Secretary under section 25E(c)(1)(D)(i)
for the taxpayer who was issued the report.
B. Failure to include the vehicle
identification number on the tax return
A taxpayer claiming a credit with respect
to a new clean vehicle under section 30D, a
previously-owned clean vehicle under sec-
tion 25E(a), or a commercial clean vehicle
under section 45W(a), is required under
sections 30D(f)(9), 25E(d), or 45W(e),
whichever is applicable, to report the VIN
of such vehicle on the taxpayer’s return.
Under proposed §301.6213-2, a taxpayer
would be treated as having omitted a cor-
rect VIN required under sections 30D(f)(9),
25E(d), and 45W(e), if the VIN is missing
from the taxpayer’s return or the number
reported on the return is an invalid VIN. A
VIN is a unique identifying code for a spe-
cific automobile. Modern VINs comprise
17 characters (digits and capital letters) that
act as a unique identifier for the vehicle and
displays the car’s unique features, specifi-
cations, and manufacturer. An invalid VIN
is a number that does not match any exist-
ing VIN reported by a qualified manufac-
turer. Under the proposed regulation, if the
IRS determines that a taxpayer has failed
to include the VIN with the tax return for
the taxable year because the VIN is missing
or invalid, the IRS is authorized to make
an assessment of the tax based on an omis-
sion of a correct VIN under either section
6213(g)(2)(T), (U), or (V), whichever is
applicable.
C. Vehicle identification number included
on the return is for ineligible vehicle
The credit under sections 30D, 25E,
or 45W is available for vehicles that
qualify as a new clean vehicle under
section 30D(d)(1), a previously-owned
clean vehicle under section 25E(c)(1),
or a qualified commercial clean vehicle
under section 45W(c). Under proposed
§301.6213-2, a taxpayer would be treated
as having omitted a correct VIN required
under sections 30D(f)(9), 25E(d), or
45W(e), if the VIN included on the tax-
payer’s return is not that of a new clean
vehicle under section 30D(d)(1), a previ-
ously-owned clean vehicle under section
25E(c)(1), or a qualified commercial clean
vehicle under section 45W(c). Under the
proposed regulation, if the IRS determines
that a taxpayer reported a VIN but the VIN
is not for a vehicle described in sections
30D(d)(1), 25E(c)(1), or 45W(c), the IRS
is authorized to make an assessment of the
tax based on an omission of a correct VIN
under section 6213(g)(2)(T), (U), or (V),
whichever is applicable.
D. Vehicle identification number is
included on the return but is claimed for
a year in which the vehicle is not eligible
for the credit
The credit under section 30D is avail-
able for each new clean vehicle placed in
service by the taxpayer during the taxable
year if the new clean vehicle meets the
critical mineral and battery component
requirements applicable for that year, as
defined in sections 30D(e)(1) and (2).
Beginning in 2023, the percentage of
the value of the applicable critical min-
erals contained in the vehicle’s battery,
as well as the percentage of the value of
the components contained in the vehi-
cle’s battery that were manufactured or
assembled in North America, must equal
or exceed the applicable percentages iden-
tified in sections 30D(e)(1) or (2) for the
relevant year. If the vehicle does not meet
at least one of the applicable percentage
requirements for critical minerals and bat-
tery components for the specified year in
which it is placed in service, the vehicle is
ineligible for the section 30D credit for the
claimed year. Therefore, a VIN reported
on a taxpayer’s return that does not meet
the section 30D(e)(1) or (2) requirements
for the applicable year cannot be a correct
VIN under section 30D.
The credits under sections 30D, 25E,
and 45W are available for vehicles that

October 23, 2023 1158 Bulletin No. 2023–43
qualify as a new clean vehicle under
section 30D(d)(1), a previously-owned
clean vehicle under section 25E(c)(1),
or a qualified commercial clean vehi-
cle under section 45W(c) for the taxable
year the vehicle is placed in service. If a
taxpayer claims the credit under sections
30D, 25E, or 45W, whichever is applica-
ble, for a year other than the year that the
vehicle was placed in service, the vehicle
is ineligible for the credit for the claimed
year. Therefore, a VIN reported on a tax-
payer’s return for a vehicle that was not
placed in service for the year the taxpayer
claims the credit cannot be a correct VIN
under sections 30D, 25E or 45W. Under
proposed §301.6213-2(b)(3), a taxpayer
would be treated as having omitted a cor-
rect VIN required under section 30D(f)
(9) if the VIN included on the tax return
is for a vehicle that is not eligible for such
credit under section 30D(e)(1) or (2) in
the taxable year that the taxpayer claims
the credit, if the taxpayer claims the credit
under section 30D, 25E, or 45W for a year
other than the year that the vehicle was
placed in service, or if the taxpayer claims
a credit under section 25E for a previous-
ly-owned clean vehicle with a model year
that is not at least two model years earlier
than the calendar year in which such vehi-
cle is acquired. Under the proposed regu-
lation, if the IRS determines the taxpayer
omitted a correct VIN required under sec-
tion 30D(f)(9) because the VIN included
on the tax return is for a vehicle that is
not eligible for such credit under section
30D(e)(1) or (2) in the taxable year that
the taxpayer claims the credit, or if the
taxpayer claims the credit under section
30D, 25E, or 45W for a year other than the
year that the vehicle was placed in service,
the IRS is authorized to make an assess-
ment of the tax based on an omission of a
correct VIN under section 6213(g)(2)(T),
(U), or (V), whichever is applicable.
E. Vehicle identification number is
included on the return but does not match
the vehicle identification number included
in the section 30D(d)(1)(H) seller report
for a particular taxpayer
Section 30D(d)(1)(H) requires the per-
son who sells a new clean vehicle to the
taxpayer to furnish a report to the taxpayer
and to the Secretary that contains (i) the
name and TIN of the taxpayer, (ii) the
VIN of the vehicle, unless, in accordance
with any applicable rules promulgated by
the Secretary of Transportation, the vehi-
cle is not assigned such a number, (iii)
the battery capacity of the vehicle, (iv)
verification that original use of the vehi-
cle commences with the taxpayer, (v) the
maximum credit under section 30D allow-
able to the taxpayer with respect to the
vehicle, and (vi) in the case of a taxpayer
who makes a vehicle transfer election,
any amount described in section 30D(g)
(2)(C) that was paid to such taxpayer.
These requirements for the seller report
reflect that it is a fundamental reporting
requirement that the VIN for each vehicle
eligible for the credit be linked to a partic-
ular taxpayer’s TIN. A VIN reported on a
taxpayer’s return by anyone other than the
reported taxpayer’s TIN cannot, therefore,
be a correct VIN for the taxpayer claiming
the section 30D credit.
To reflect this TIN/VIN linkage and
ensure that only the taxpayer who pur-
chased the vehicle is able to claim the VIN
for the vehicle eligible for the section 30D
credit, proposed §301.6213-2(b)(4) would
provide that a taxpayer is treated as hav-
ing omitted a correct VIN on a tax return
as required under section 30D(f)(9) if the
VIN on the tax return does not match the
VIN included in the seller report under
section 30D(d)(1)(H) for the taxpayer
claiming the credit. Under the proposed
regulation, if the IRS determines that
a taxpayer reported a VIN but the VIN
claimed on the taxpayer’s return is not
for a vehicle that was reported to the IRS
and the taxpayer on the section 30D(d)
(1)(H) report for that taxpayer, the IRS is
authorized to make an assessment of the
tax based on an omission of a correct VIN
under section 6213(g)(2)(T).
F. Vehicle identification number is
included on the return but does not
match the vehicle identification number
included in the section 25E(c)(1)(D)(i)
seller report for a particular taxpayer
Section 25E(c)(1)(D)(i) requires the
person who sells a previously-owned clean
vehicle to the taxpayer to furnish a report
to the taxpayer and to the Secretary that
meets the requirements of section 30D(d)
(1)(H) (except for clause (iv) thereof).
Just like the requirements for the seller
report for a new clean vehicle, the require-
ments for the seller’s previously-owned
clean vehicle report reflect a fundamental
linkage between the VIN for each vehi-
cle eligible for the credit and a particu-
lar taxpayer’s TIN. For the same reasons
listed in section V.E of this Explanation
of Provisions, a VIN reported on a tax-
payer’s return by anyone other than the
reported taxpayer’s TIN cannot, therefore,
be a correct VIN for the taxpayer claiming
the section 25E credit.
To reflect this TIN/VIN linkage and
ensure that only the taxpayer who pur-
chased the vehicle is able to claim the VIN
for the vehicle eligible for the section 25E
credit, proposed §301.6213-2(b)(5) would
provide that a taxpayer is treated as having
omitted a correct VIN on a tax return as
required under section 25E(d) if the VIN
on the tax return does not match the VIN
included in the seller report under section
25E(c)(1)(D)(i) for a taxpayer claiming
the credit. Under the proposed regula-
tion, if the IRS determines that a taxpayer
included a VIN on a tax return but the VIN
claimed on the taxpayer’s return is not for
a vehicle that was reported to the IRS and
the taxpayer under sections 25E(c)(1)(D)
(i) for that taxpayer, the IRS would be
authorized to make an assessment of the
tax based on an omission of a correct VIN
under section 6213(g)(2)(U).
VI. Severability
If any provision in this proposed
rulemaking is held to be invalid or unen-
forceable facially, or as applied to any per-
son or circumstance, it shall be severable
from the remainder of this rulemaking,
and shall not affect the remainder thereof,
or the application of the provision to other
persons not similarly situated or to other
dissimilar circumstances.
Proposed Applicability Dates
Except as described in the following
paragraph, these regulations are generally
proposed to apply to new clean vehicles
and previously-owned clean vehicles
placed in service in taxable years begin-
ning after October 10, 2023.
Proposed §§1.25E-3, 1.30D-5, and
301.6213-2 are proposed to apply to

Bulletin No. 2023–43 1159 October 23, 2023
taxable years beginning after December
31, 2023. The applicability date of pro-
posed §§1.25E-3 and 1.30D-5 would
align with the applicability date of the
transfer provisions of the section 25E or
section 30D credit, which apply to vehi-
cles acquired or placed in service, respec-
tively, after December 31, 2023. Proposed
§301.6213-2 describes the exercise of math
error authority with respect to omission of
a correct VIN, which relates in part to seller
reporting. Application of this proposed rule
to taxable years beginning after December
31, 2023, would align with the commence-
ment of the electronic submission of seller
reporting to improve administration of the
section 25E and section 30D credits.
Effect on Other Documents
This notice of proposed rulemaking
modifies proposed §§1.30D-2 and 1.30D-4
of the April 2023 proposed regulations.
Special Analyses
I. Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(44 U.S.C. 3501-3520) (PRA) generally
requires that a Federal agency obtain the
approval of the Office of Management
and Budget (OMB) before collecting
information from the public, whether such
collection of information is mandatory,
voluntary, or required to obtain or retain
a benefit.
For purposes of the PRA, the report-
ing burden associated with the collection
of information in proposed §§1.25E-3
and 1.30D-5 regarding vehicle transfer
elections will be reflected in the PRA
Submissions associated with Revenue
Procedure 2023-33. The IRS is seeking
OMB approval and requesting a new OMB
control number for Revenue Procedure
2023-33. These proposed regulations do
not alter previously accounted for infor-
mation collection requirements and do not
create new collection requirements. OMB
Control Number 1545–2137 covers Form
8936 and Form 8936-A regarding electric
vehicle credits, including the new require-
ment in section 30D(f)(9) to include on the
taxpayer’s return for the taxable year the
VIN of the vehicle for which the section
30D credit is claimed. Revenue Procedure
2022-42 describes the procedural require-
ments for qualified manufacturers to make
periodic written reports to the Secretary
to provide information related to each
vehicle manufactured by such manufac-
turer that is eligible for the section 30D
credit as required in section 30D(d)(3),
including the critical mineral and battery
component certification requirements
in section 30D(e)(1)(A) and (2)(A). In
addition, Revenue Procedure 2022-42
also provides the procedures for sellers
of new clean vehicles to report informa-
tion required by section 30D(d)(1)(H) for
vehicles to be eligible for the section 30D
credit. The collections of information con-
tained in Revenue Procedure 2022-42 are
described in that document and were sub-
mitted to the Office of Management and
Budget in accordance with the PRA under
control number 1545-2137.
II. Regulatory Flexibility Act
The Regulatory Flexibility Act (5
U.S.C. 601 et seq.) (RFA) imposes certain
requirements with respect to Federal rules
that are subject to the notice and comment
requirements of section 553(b) of the
Administrative Procedure Act (5 U.S.C.
551 et seq.) and that are likely to have a
significant economic impact on a substan-
tial number of small entities. Unless an
agency determines that a proposal will not
have a significant economic impact on a
substantial number of small entities, sec-
tion 603 of the RFA requires the agency
to present an initial regulatory flexibility
analysis (IRFA) of the proposed rule. The
Treasury Department and the IRS have
not determined whether the proposed rule,
when finalized, will have a significant
economic impact on a substantial num-
ber of small entities. This determination
requires further study. However, because
there is a possibility of a significant eco-
nomic impact on a substantial number
of small entities, an IRFA is provided in
these proposed regulations. The Treasury
Department and the IRS invite comments
on both the number of entities affected
and the economic impact on small entities.
A. Need For and Objectives of the Rule
The proposed regulations would pro-
vide the eligibility rules and key definitions
regarding the section 25E credit to allow
taxpayers to know whether their purchase
of a used vehicle is eligible for the sec-
tion 25E credit. In addition, the proposed
regulations would provide rules regard-
ing the recapture authority under sections
30D(f)(5) and 25E(e), so that taxpayers
and the IRS have clear rules regarding
when a clean vehicle may cease being eli-
gible property for purposes of the section
25E and section 30D credits. Further, the
proposed regulations would provide rules
regarding the meaning of the omission of
a correct VIN for purposes of math error
authority as described in section 6213(g)
(2). Clear rules regarding the exercise of
math error authority will provide for effi-
cient and fair tax administration.
The proposed regulations would pro-
vide guidance for purposes of taxpayers
electing to transfer vehicle credits under
sections 25E(f) and 30D(g) to eligible
entities and for eligible entities partici-
pating in the advance payment program
with respect to those transferred credits.
The proposed rules would provide rules
regarding the process for taxpayers to
elect to transfer the credit and for eligible
entities to register and receive advance
payments from the IRS and rules regard-
ing the Federal income tax treatment of
the vehicle transfer election, including
recapture and excessive payments. The
proposed rules regarding the vehicle trans
-
fer election ensure certainty regarding the
consequences of the transfer election,
decrease the risk of fraud, and expedite
the process by which an eligible entity
may receive an advance payment under
section 25E(f) or 30D(g).
The proposed rules are expected to
encourage taxpayers to increase the
placing in service of new and previ-
ously-owned clean vehicles. Thus, the
Treasury Department and the IRS intend
and expect that the proposed rules will
deliver benefits across the economy and
environment that will beneficially impact
various industries, including clean vehicle
manufacturers and dealers.
B. Affected Small Entities
The Small Business Administration
estimates in its 2023 Small Business
Profile that 99.9 percent of United States
businesses meet its definition of a small

October 23, 2023 1160 Bulletin No. 2023–43
business. The applicability of these pro-
posed regulations does not depend on the
size of the business, as defined by the Small
Business Administration. As described
more fully in the preamble to this pro-
posed regulation and in this IRFA, these
rules may affect a variety of different busi-
nesses across several different industries,
but will primarily affect dealers of new
and previously-owned clean vehicles who
would like to be eligible entities to receive
a transferred credit from the buyers of a
clean vehicle. The Treasury Department
and the IRS currently estimate the num-
ber of dealers of new clean vehicles to be
approximately 16,000, and the number of
dealers of previously-owned clean vehi-
cles to be approximately 36,000.
Of the estimated 16,000 dealers of new
clean vehicles, we estimate that 10,000
will have receipts in excess of $25 mil-
lion; 3,000 will have receipts between
$10-$25 million; 1,000 will have receipts
between $5-10 million, and 2,000 will
have receipts under $5 million. Of the
estimated 36,000 dealers of previous-
ly-owned clean vehicles, we estimate that
500 will have receipts in excess of $25
million; 1,500 will have receipts between
$10-$25 million; 2,000 will have receipts
between $5-10 million, and 32,000 will
have receipts under $5 million.
The Treasury Department and the IRS
expect to receive more information on
the impact on small businesses through
comments on this proposed rule and
again when participation in the election to
transfer credits under sections 25E(f) and
30D(g) commences.
1. Impact of the Rules
The recordkeeping and reporting
requirements would increase for taxpay-
ers who elect to transfer the section 25E
or 30D credit to an eligible entity. In
addition, the recordkeeping and reporting
requirements would increase for dealers
who seek to qualify as eligible entities and
participate in the advance payment pro-
gram. Although the Treasury Department
and the IRS do not have sufficient data
to determine precisely the likely extent
of the increased costs of compliance, the
estimated burden of complying with the
recordkeeping and reporting requirements
are described in the PRA section of the
preamble. The Treasury Department and
IRS estimate that, based on the total of
52,000 dealers of new (16,000) and pre-
viously-owned (36,000) clean vehicles, it
will take approximately one hour to regis-
ter as entities eligible to receive advance
payments of credits under sections 25E
and 30D, for a total of 52,000 hours total.
The Treasury Department and IRS fur-
ther estimate that there are approximately
950,000 taxpayers who will purchase new
clean vehicles and 28,750 taxpayers who
will purchase previously-owned clean
vehicles who will elect to transfer their
respective credits to the eligible entity, for
a total of 978,750 elections annually. The
Treasury Department and IRS estimate
each election will take approximately 15
minutes to complete, for a total burden of
approximately 244,688 hours per year.
2. Alternatives Considered
The Treasury Department and the
IRS considered various alternatives in
promulgating these proposed regula-
tions. Significant alternatives considered
include: (1) the sale price definition in pro-
posed §1.25E-1(b)(9); (2) the first transfer
rule described in proposed §1.25E-1(b)
(8); (3) the recapture rules provided in
proposed §§1.25E-2(c) and 1.30D-4(f),
and (4) the dealer registration require-
ments provided in proposed §§1.25E-3(b)
and 1.30D-5(b).
Regarding the sale price definition in
proposed §1.25E-1(b)(9), the Treasury
Department and the IRS considered the
appropriate scope of the definition and
how the definition of sale price should
be consistent with or diverge from the
definition of manufacturer’s suggested
retail price for purposes of section 30D(f)
(11). The definition of manufactur-
er’s suggested retail price in proposed
§1.30D-2(c) of the April 2023 proposed
regulations refers to a statutory definition
in 15 U.S.C. 1232 that is used for purposes
of vehicle labeling on the vehicle window
sticker. That proposed definition includes
optional accessories or items included by
the manufacturer at the time of delivery to
the dealer but excludes delivery charges
to the dealer. For used vehicles, however,
there are not similar vehicle labeling stan-
dards that provide a standard for defining
sales price. In addition, in a used vehicle
sale the dealer and buyer may negotiate to
characterize a portion of the sale price as a
separately stated fee or charge (other than
those required by law) to avoid the section
25E sales price cap of $25,000. To prevent
this type of recharacterization, proposed
§1.25E-1(b)(9) defines sale price to mean
the total sale price agreed upon by the
buyer and the dealer, including any deliv-
ery charges. This definition specifically
excludes separately-stated taxes and fees
required by State or local law, since such
taxes and fees are not subject to negoti-
ation or recharacterization by the dealer
and buyer.
The Treasury Department and the IRS
considered various alternatives to the
first transfer rule described in proposed
§1.25E-1(b)(8). This rule is necessary to
determine whether a sale of a previous-
ly-owned clean vehicle is a qualified sale
pursuant to section 25E(c)(2). One of the
requirements to be a qualified sale is that
the sale be the first transfer to a qualified
buyer since the enactment of section 25E
other than to the person with whom the
original use of the vehicle commenced.
However, some of the characteristics of
being a qualified buyer are unknowable to
the dealer and the buyer in a subsequent
sale, including that a qualified buyer be
an individual, not be a dependent, and not
have claimed the section 25E credit in the
prior three years. As a result, if a previous-
ly-owned clean vehicle is transferred more
than once after the date of enactment of
section 25E, there is no way for the parties
after the first transfer to know if the first
transfer was to a qualified buyer. Because
the IRS may have access to some infor-
mation necessary to determine whether a
first transfer was to a qualified buyer, the
Treasury Department and the IRS consid-
ered alternatives to the first transfer rule
such as a look-up tool regarding prior
claims of the section 25E credit for a par-
ticular vehicle or information regarding
prior vehicle purchasers. However, disclo-
sure of this information raises significant
confidentiality issues. Accordingly, the
Treasury Department and the IRS have
proposed the first transfer rule to provide
certainty to buyers and dealers as to which
transfer of a previously-owned clean vehi-
cle is the first transfer and will qualify for
the section 25E credit by relying on the
vehicle history.

Bulletin No. 2023–43 1161 October 23, 2023
The Treasury Department and the IRS
considered alternatives to the recapture
rules provided in proposed §§1.25E-2(c)
and 1.30D-4(f). Given the increased avail-
ability and benefits of the section 30D
credit and the new section 25E credit when
the credit can be transferred to an eligible
entity and is not limited by the taxpayer’s
tax liability, the Treasury Department and
the IRS determined it was necessary to
provide rules regarding when the value of
the clean vehicle credits can be recaptured.
The Treasury Department and the IRS also
considered the appropriate length of time
within which a return or resale of a vehi-
cle would make the taxpayer ineligible for
the credit. Longer and shorter periods of
time were considered. Based on industry
standard return policies, including money
back guarantees, the Treasury Department
and the IRS determined that it was appro-
priate to deny the benefit of the credit if the
credit was returned within 30 days. In addi-
tion, the Treasury Department and the IRS
determined it was reasonable to assume an
intent to resell the vehicle, making the pur-
chase of the vehicle ineligible, if the vehi-
cle was resold within 30 days.
Finally, with respect to the dealer regis-
tration requirements provided in proposed
§§1.25E-3(b) and 1.30D-5(b), the Treasury
Department and the IRS considered various
processes by which a seller could become
an eligible entity and participate in the
advance payment program. The Treasury
Department and the IRS considered a pro-
cess that did not require submission of a sig-
nificant amount of information prior to the
dealer becoming an eligible entity, but such
an approach could require more back-end
compliance. To ensure efficient tax admin-
istration and reduce fraud, the Treasury
Department and the IRS determined that
an up-front, electronic registration process
was necessary for the IRS to effectively
review and validate eligible entity status.
To ensure efficient tax administration and
reduce fraud, the Treasury Department and
the IRS determined that an up-front, elec-
tronic registration process was necessary
for the IRS to effectively review and val-
idate eligible entity status. In addition, the
Treasury Department and the IRS deter-
mined that dealers must submit identity
information and attestations regarding their
participation in the advance payment pro-
gram to ensure program integrity. Finally,
the Treasury Department and the IRS
determined that dealer tax compliance was
necessary to ensure that advance payments
are being paid only to compliant dealers.
3. Duplicative, Overlapping, or
Conflicting Federal Rules
The proposed rule would not dupli-
cate, overlap, or conflict with any rele-
vant Federal rules. As discussed in the
Explanation of Provisions, the proposed
rules would merely provide requirements,
procedures, and definitions related to the
clean vehicle transfer election programs
for sections 25E and 30D. The Treasury
Department and the IRS invite input from
interested members of the public about
identifying and avoiding overlapping,
duplicative, or conflicting requirements.
III. Section 7805(f)
Pursuant to section 7805(f), this
notice of proposed rulemaking has been
submitted to the Chief Counsel for the
Office of Advocacy of the Small Business
Administration for comment on its impact
on small business.
IV. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates
Reform Act of 1995 (UMRA) requires
that agencies assess anticipated costs and
benefits and take certain other actions
before issuing a final rule that includes
any Federal mandate that may result in
expenditures in any one year by a State,
local, or Tribal government, in the aggre-
gate, or by the private sector, of $100
million (updated annually for inflation).
This proposed rule does not include any
Federal mandate that may result in expen-
ditures by State, local, or Tribal govern-
ments, or by the private sector in excess of
that threshold.
V. Executive Order 13132: Federalism
Executive Order 13132 (Federalism)
prohibits an agency from publishing
any rule that has federalism implica-
tions if the rule either imposes substan-
tial, direct compliance costs on State and
local governments, and is not required
by statute, or preempts State law, unless
the agency meets the consultation and
funding requirements of section 6 of the
Executive order. This proposed rule does
not have federalism implications and does
not impose substantial direct compliance
costs on State and local governments or
preempt State law within the meaning of
the Executive order.
VI. Regulatory Planning and Review
Pursuant to the Memorandum
of Agreement, Review of Treasury
Regulations under Executive Order 12866
(June 9, 2023), tax regulatory actions issued
by the IRS are not subject to the require-
ments of section 6 of Executive Order
12866, as amended. Therefore, a regulatory
impact assessment is not required.
Comments and Requests for a Public
Hearing
Before these proposed amendments to
the regulations are adopted as final reg-
ulations, consideration will be given to
comments that are submitted timely to the
IRS as prescribed in this preamble under
the ADDRESSES section. The Treasury
Department and the IRS request com-
ments on all aspects of the proposed reg-
ulations. Any comments submitted will
be made available at https://www.regula-
tions.gov or upon request.
A public hearing will be scheduled if
requested in writing by any person who
timely submits electronic or written com-
ments. Requests for a public hearing are
also encouraged to be made electronically.
If a public hearing is scheduled, notice of
the date and time for the public hearing
will be published in the Federal Register.
Announcement 2023-16, 2023-20
I.R.B. 854 (May 15, 2023), provides that
public hearings will be conducted in per-
son, although the IRS will continue to pro-
vide a telephonic option for individuals
who wish to attend or testify at a hearing by
telephone. Any telephonic hearing will be
made accessible to people with disabilities.
Statement of Availability of IRS
Documents
Guidance cited in this preamble is pub-
lished in the Internal Revenue Bulletin and
is available from the Superintendent of

October 23, 2023 1162 Bulletin No. 2023–43
Documents, U.S. Government Publishing
Office, Washington, DC, 20402, or by vis-
iting the IRS website at https://www.irs.
gov.
Drafting Information
The principal author of these proposed
regulations is the Office of the Associate
Chief Counsel (Passthroughs and Special
Industries). However, other personnel
from the Treasury Department and the
IRS participated in their development.
List of Subjects
26 CFR Part 1
Income taxes, Reporting and record-
keeping requirements.
26 CFR Part 301
Employment taxes, Estate taxes,
Excise taxes, Gift taxes, Income taxes,
Penalties, Reporting and recordkeeping
requirements.
Proposed Amendments to the
Regulations
Accordingly, the Treasury Department
and the IRS propose to amend 26 CFR
parts 1 and 301 as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 is amended by adding entries
in numerical order for §§1.25E-1 through
1.25E-3 and 1.30D-5 to read in part as
follows:
Authority: 26 U.S.C. 7805 * * *
Sections 1.25E-1 through 1.25E-3 also
issued under 26 U.S.C. 25E.
* * * * *
Section 1.30D-5 also issued under 26
U.S.C. 30D.
* * * * *
Par 2. Sections 1.25E-0 through
1.25E-3 are added to read as follows:
Sec.
* * * * *
1.25E-0 Table of contents.
1. 25E-1 Credit for previously-owned
clean vehicles.
1. 25E-2 Special rules.
1. 25E-3 Transfer of credit.
* * * * *
§1.25E-0 Table of contents.
This section lists the captions con-
tained in §§1.25E-1 through 1.25E-3.
§1.25E-1 Credit for previously-owned
clean vehicles.
(a) In general.
(b) Definitions.
(1) Dealer.
(2) Incentive.
(3) Modified adjusted gross income.
(4) Placed in service.
(5) Previously-owned clean vehicle.
(6) Qualified buyer.
(7) Qualified manufacturer.
(8) Qualified sale.
(i) In general.
(ii) First transfer rule.
(9) Sale price.
(10) Section 25E regulations.
(11) Seller report.
(c) Limitation based on modified
adjusted gross income.
(1) In general.
(2) Threshold amount.
(3) Special rule for change in filing
status.
(d) Limitation on multiple owners.
(1) In general.
(2) Seller reporting.
(e) Examples.
(1) Example 1.
(2) Example 2.
(3) Example 3.
(4) Example 4.
(5) Example 5.
(6) Example 6.
(f) Severability.
(g) Applicability date.
§1.25E-2 Special rules.
(a) In general.
(b) No double benefit.
(1) In general.
(2) Interaction of section 30D and sec-
tion 25E no double benefit rules.
(c) Recapture.
(1) In general.
(i) Cancelled sale.
(ii) Vehicle return.
(iii) Resale.
(iv) Other returns and resales.
(2) Recapture rules in the case of a
vehicle transfer election.
(3) Example.
(d) Branded title.
(e) Seller registration.
(f) Requirement to file a complete
income tax return.
(g) Severability.
(h) Applicability date.
§1.25E-3 Transfer of credit.
(a) In general.
(b) Definitions.
(1) Advance payment program.
(2) Dealer.
(3) Dealer tax non-compliance.
(4) Electing taxpayer.
(5) Eligible entity.
(6) Registered dealer.
(7) Time of sale.
(8) Vehicle transfer election.
(c) Dealer registration.
(1) In general.
(2) Effect of dealer tax non-compliance.
(d) Vehicle transfer election by electing
taxpayer to transfer credit.
(e) Federal income tax consequences
of the vehicle transfer election.
(1) Treatment of electing taxpayer.
(2) Treatment of eligible entity.
(3) Form of payment from eligible
entity to electing taxpayer.
(4) Application of certain other
requirements.
(5) Examples.
(f) Advance payments received by eli-
gible entities.
(1) In general.
(2) Requirements for a registered
dealer to become an eligible entity.
(3) Suspension of registered dealer
eligibility.
(4) Revocation of registered dealer
eligibility.
(g) Increase in tax.
(1) Recapture where taxpayer exceeds
modified adjusted gross income limitation.
(2) Excessive payments.
(i) In general.
(ii) Reasonable cause.
(iii) Excessive payment defined.
(iv) Special rule for cases in which
the purchaser’s modified adjusted gross
income exceeds the limitation.
(3) Example.

Bulletin No. 2023–43 1163 October 23, 2023
(h) Requirement of return.
(1) In general.
(2) Income tax return.
(i) Two vehicle transfer elections per
year.
(j) Severability.
(k) Applicability date.
§1.25E-1 Credit for previously-owned
clean vehicles.
(a) In general. Section 25E(a) of the
Internal Revenue Code (Code) allows as a
credit against the tax imposed by chapter
1 of the Code (chapter 1) for the taxable
year of a taxpayer an amount equal to the
lesser of $4,000, or the amount equal to
30 percent of the sale price of a previous-
ly-owned clean vehicle, when that pre-
viously-owned clean vehicle is placed in
service during the taxable year by a tax-
payer that acquired the previously-owned
clean vehicle in a qualified sale in which
that taxpayer is a qualified buyer. This
section provides definitions and generally
applicable rules that apply for purposes
of determining the credit under section
25E and the section 25E regulations (as
defined in paragraph (b)(10) of this sec-
tion) (section 25E credit). Section 1.25E-2
provides special rules under section
25E(e). Section 1.25E-3 provides rules
under section 25E(f).
(b) Definitions. The following defini-
tions apply for purposes of the section 25E
regulations.
(1) Dealer. Dealer has the meaning
provided in section 25E(c)(2)(A) by ref-
erence to section 30D(g)(8), except that
the term does not include persons licensed
solely by a territory of the United States,
and includes a dealer licensed in any juris-
diction described in section 30D(g)(8)
(other than one licensed solely by a terri-
tory of the United States) that makes sales
at sites outside of the jurisdiction in which
its licensed.
(2) Incentive. For purposes of the defi-
nition of sale price in paragraph (b)(9) of
this section, incentive means any reduction
in total sale price offered to and accepted
by a taxpayer from the dealer or manufac-
turer, other than a reduction in the form
of a partial payment or down payment for
the purchase of a previously-owned clean
vehicle pursuant to section 25E(f) and
§1.25E-3.
(3) Modified adjusted gross income.
Modified adjusted gross income has the
meaning provided in section 25E(b)(3).
(4) Placed in service. A previous-
ly-owned clean vehicle is considered to be
placed in service on the date the taxpayer
takes possession of the vehicle.
(5) Previously-owned clean vehicle.
Previously-owned clean vehicle has the
meaning provided in section 25E(c)(1).
(6) Qualified buyer. Qualified buyer
means, with respect to a sale of a motor
vehicle, a taxpayer—
(i) Who is an individual;
(ii) Who purchases such vehicle for use
and not for resale;
(iii) With respect to whom no deduc-
tion is allowable to another taxpayer under
section 151 of the Code; and
(iv) Who has not been allowed a credit
under section 25E and this section for any
sale occurring during the period beginning
three calendar years before the date of the
sale of the vehicle and ending on the date
of the sale.
(7) Qualified manufacturer. Qualified
manufacturer has the meaning provided in
section 30D(d)(3).
(8) Qualified sale—(i) In general.
Qualified sale means a sale of a motor
vehicle—
(A) By a dealer (as defined in para-
graph (b)(1) of this section);
(B) For a sale price that does not exceed
$25,000; and
(C) That is the first transfer of the
motor vehicle after August 16, 2022 (the
date of enactment of section 25E), to a
qualified buyer other than the person with
whom the original use of such vehicle
commenced.
(ii) First transfer rule. To be a qualified
sale, a transfer must be the first transfer
since August 16, 2022, as shown by vehi-
cle history, of a previously-owned clean
vehicle after the sale to the person with
whom the original use of such vehicle
commenced. For purposes of this para-
graph (b)(8)(ii), a transfer to or between
dealers is ignored. The taxpayer may rely
on the dealer’s provision of the vehicle
history in determining whether the first
transfer rule in this paragraph (b)(8)(ii) is
satisfied.
(9) Sale price. The sale price of a pre-
viously-owned clean vehicle means the
total sale price agreed upon by the buyer
and dealer in a written contract at the time
of sale, including any delivery charges
and after the application of any incentives,
but excluding separately-stated taxes and
fees required by State or local law. The
sale price of a previously-owned clean
vehicle is determined before the applica-
tion of any trade-in value.
(10) Section 25E regulations. Section
25E regulations means this section and
§§1.25E-2 and 1.25E-3.
(11) Seller report. Seller report means
the report described in section 25E(c)(1)
(D)(i) by reference to section 30D(d)(1)
(H) and provided by the seller of a vehi-
cle to the taxpayer and to the IRS elec-
tronically in the manner provided in,
and containing the information described
in, guidance published in the Internal
Revenue Bulletin (see §601.601(d)(2)(ii)
(a) of this chapter). The seller report must
be provided to the IRS electronically. The
term seller report does not include a report
rejected by the IRS due to the informa-
tion contained therein not matching IRS
records.
(c) Limitation based on modified
adjusted gross income—(1) In general.
No section 25E credit is allowed for any
taxable year if—
(i) The lesser of—
(A) The modified adjusted gross
income of the taxpayer for such taxable
year; or
(B) The modified adjusted gross
income of the taxpayer for the preceding
taxable year; exceeds
(ii) The threshold amount.
(2) Threshold amount. For purposes
of paragraph (c)(1) of this section, the
threshold amount is determined based on
the taxpayer’s return filing status for the
taxable year, as set forth in paragraphs (c)
(2)(i) through (iii) of this section—
(i) In the case of a joint return or a sur-
viving spouse (as defined in section 2(a)
of the Code), the threshold amount is
$150,000.
(ii) In the case of a head of household
(as defined in section 2(b) of the Code),
the threshold amount is $112,500.
(iii) In the case of a taxpayer not
described in paragraph (c)(2)(i) or (ii)
of this section, the threshold amount is
$75,000.
(3) Special rule for change in filing
status. If the taxpayer’s filing status for

October 23, 2023 1164 Bulletin No. 2023–43
the taxable year differs from the taxpay-
er’s filing status in the preceding taxable
year, then the taxpayer satisfies the lim-
itation described in paragraph (c)(1) of
this section if the taxpayer’s modified
adjusted gross income does not exceed the
threshold amount in either year based on
the applicable filing status for that taxable
year.
(d) Limitation on multiple owners—(1)
In general. The amount of the section 25E
credit attributable to a previously-owned
clean vehicle may be claimed on only
one tax return. In the event a previous-
ly-owned clean vehicle is placed in ser-
vice by multiple owners (for example, in
the case of married individuals filing sep-
arate returns), no allocation or proration of
the section 25E credit is available.
(2) Seller reporting. The name and tax-
payer identification number of the vehicle
owner claiming the section 25E credit
must be listed on the seller report pursuant
to sections 25E(c)(1)(D)(i) and 30D(d)(1)
(H). The credit will be allowed only on the
tax return of the owner listed in the seller
report.
(e) Examples. The following examples
illustrate the application of the rules in this
section.
(1) Example 1: First transfer since enactment
of section 25E. A two-year-old qualifying vehicle
has been sold as used prior to August 16, 2022 (the
date of enactment of section 25E). The next sale of
the vehicle occurs on September 1, 2023, for a sale
price below $25,000 from a dealer to a qualified
buyer whose modified adjusted gross income does
not exceed the limitation described in paragraph (c)
of this section. This sale is a qualified sale pursuant
to paragraph (b)(8) of this section and, therefore, the
buyer will qualify for the section 25E credit.
(2) Example 2: Multiple transfers since enact-
ment of section 25E. The facts are the same as in
paragraph (e)(1) of this section (Example 1), except
that the first sale of the used vehicle occurs after
August 16, 2022, for a sale price above $25,000.
The first sale of the used vehicle would not qualify
for a credit under section 25E because the sale price
exceeded $25,000. The second sale is not a qualified
sale because it was not the first transfer after enact-
ment of section 25E.
(3) Example 3: First buyer is a commercial
buyer. The facts are the same as in paragraph (e)(1)
of this section (Example 1), except that the first sale
of the used vehicle occurs after August 16, 2022, to a
partnership, for a sale price below $25,000. The first
sale would not qualify for a credit under section 25E
because the buyer is a partnership, not an individual.
The second sale is not a qualified sale because it is
not the first transfer after enactment of section 25E.
(4) Example 4: First buyer exceeds the modified
adjusted gross income limits. The facts are the same
as in paragraph (e)(1) of this section (Example 1),
except that the first sale of the used vehicle occurs
after August 16, 2022, and was sold to a buyer
whose modified adjusted gross income exceeds the
limitation described in paragraph (c) of this sec-
tion. Subsequently, the vehicle is sold again for less
than $25,000 to a qualified buyer whose modified
adjusted gross income is below the limitation. The
first sale would not qualify for a credit under sec-
tion 25E because the buyer’s modified adjusted gross
income exceeds the limitation, and the second sale is
not a qualified sale because it is not the first transfer
after the enactment of section 25E.
(5) Example 5: First buyer elects to not take
the section 25E credit. The facts are the same as in
paragraph (e)(1) of this section (Example 1), except
that the first sale of the used vehicle occurred after
August 16, 2022, and was sold to a qualified buyer
for a sale price below $25,000, but that first buyer
elects to not claim the section 25E credit. The second
sale is not a qualified sale because it is not the first
transfer after the enactment of section 25E.
(f) Severability. The provisions of this
section are separate and severable from
one another. If any provision of this sec-
tion is stayed or determined to be invalid,
it is the agencies’ intention that the remain-
ing provisions shall continue in effect.
(g) Applicability date. This section
applies to previously-owned clean vehi-
cles placed in service in taxable years
beginning after October 10, 2023.
§1.25E-2 Special rules.
(a) In general. This section provides
additional guidance under section 25E(e)
of the Internal Revenue Code (Code),
which incorporates rules similar to the
rules of section 30D(f) other than section
30D(f)(10) or 30D(f)(11). Unless other-
wise provided in this section, the rules of
section 30D(f) apply to section 25E and
the section 25E regulations (as defined in
§1.25E-1(b)(10)) in the same manner by
replacing, if applicable, any reference to
section 30D or the section 30D credit with
a reference to section 25E or the section
25E credit.
(b) No double benefit—(1) In gen-
eral. Under sections 25E(e) and 30D(f)
(2), the amount of any deduction or other
credit allowable under chapter 1 of the
Code (chapter 1) for a vehicle for which
a section 25E credit is allowable must be
reduced by the amount of the section 25E
credit allowed for such vehicle.
(2) Interaction of section 30D and
section 25E no double benefit rules. A
section 30D credit that has been allowed
with respect to a vehicle in a taxable year
before the year in which a section 25E
credit under section 25E is allowable for
that vehicle does not reduce the amount
allowable under section 25E.
(c) Recapture—(1) In general. This
paragraph (c) provides rules regarding the
recapture of the section 25E credit.
(i) Cancelled sale. If the sale of a vehi-
cle between the taxpayer and dealer is
cancelled before the taxpayer places the
vehicle in service, then—
(A) The taxpayer may not claim the
section 25E credit with respect to the
vehicle;
(B) The sale will be treated as not
having occurred (and no transfer is con-
sidered to have occurred by reason of
the cancelled sale), and the vehicle will,
therefore, still qualify for the section 25E
credit upon a subsequent sale meeting the
requirements of section 25E and the sec-
tion 25E regulations;
(C) The seller report (as defined in
§1.25E-1(b)(11)) must be rescinded by the
seller in the manner set forth in guidance
published in the Internal Revenue Bulletin
(see §601.601(d)(2)(ii)(a) of this chapter);
and
(D) The taxpayer cannot make an elec-
tion to transfer the credit under section
25E(f) and §1.25E-3.
(ii) Vehicle return. If a taxpayer returns
a vehicle to the dealer within 30 days of
placing such vehicle in service, then—
(A) The taxpayer cannot claim the sec-
tion 25E credit with respect to the vehicle;
(B) The sale will be treated as having
occurred (and a transfer is therefore con-
sidered as having occurred by reason of
the sale), and the vehicle will not qualify
for the section 25E credit upon a subse-
quent sale, unless the vehicle history does
not reflect the prior sale and return; if the
vehicle history does not reflect the prior
sale and return, the vehicle remains eli-
gible for the section 25E credit under the
first transfer rule described in §1.25E-1(b)
(8)(ii);
(C) The seller report (as defined in
§1.25E-1(b)(11)) must be updated by the
seller; and
(D) Any vehicle transfer election made
pursuant to section 25E(f) and §1.25E-3,
if applicable, will be treated as nullified
and any advance payment made pursuant
to section 25E(f) and §1.25E-3, if appli-
cable, will be collected from the eligible

Bulletin No. 2023–43 1165 October 23, 2023
entity as an excessive payment pursuant to
§1.25E-3.
(iii) Resale. If a taxpayer resells the
vehicle within 30 days of placing the
vehicle in service, then the taxpayer is
treated as having purchased the previous-
ly-owned clean vehicle with the intent to
resell, and—
(A) The taxpayer may not claim the
section 25E credit with respect to the
vehicle;
(B) The sale to the taxpayer will be
treated as occurring (and a transfer is
therefore considered as occurring by rea-
son of the sale), and the vehicle will not
qualify for the section 25E credit upon a
subsequent sale;
(C) The seller report (as defined in
§1.25E-1(b)(11)) will not be updated; and
(D) Any vehicle transfer election made
pursuant to section 25E(f) and §1.25E-3,
if applicable, will remain in effect and any
advance payment made pursuant to sec-
tion 25E(f) and §1.25E-3 will not be col-
lected from the eligible entity; and
(E) The value of the transferred credit
will be collected from the taxpayer.
(iv) Other returns and resales. In the
case of a vehicle return not described
in paragraph (c)(1)(ii) or a resale not
described in paragraph (c)(1)(iii), the
vehicle will no longer be eligible for the
section 25E credit upon a subsequent sale.
(2) Recapture rules in the case of a
vehicle transfer election. For additional
recapture rules that apply in the case of
a vehicle transfer election, see §1.25E-
3(g)(1). For excessive payment rules
that apply in the case where an advance
payment is made to an eligible entity, see
§1.25E-3(g)(2).
(3) Example: First buyer returns vehi-
cle. A two-year-old qualifying vehicle is
sold to a qualified buyer after August 16,
2022, for less than $25,000, but the buyer
returns the vehicle to the dealer within 30
days and does not claim the credit under
section 25E. The vehicle history reflects
the first used sale and return. A second
sale of the used vehicle is not a qualified
sale because the first sale occurred after
the enactment of section 25E, regardless
of whether the first buyer claimed the
credit under section 25E.
(d) Branded title. A title to a previ-
ously-owned clean vehicle indicating
that such vehicle has been damaged, or is
otherwise a branded title, does not impact
the vehicle’s eligibility for a section 25E
credit.
(e) Seller registration. A seller must
register with the IRS in the manner set
forth in guidance published in the Internal
Revenue Bulletin (see §601.601(d)(2)(ii)
(a) of this chapter) for purposes of filing
seller reports.
(f) Requirement to file a complete
income tax return. No section 25E credit
is allowed unless the taxpayer claiming
such credit files an income tax return for
the taxable year in which the previous-
ly-owned clean vehicle is placed in ser-
vice. For purpose of this paragraph (f),
the term income tax return means a Form
1040, U.S. Individual Income Tax Return,
with an attached Form 8936, Clean
Vehicle Credits, or successor forms, and
any additional forms, schedules, or state-
ments prescribed by the Commissioner for
the purpose of making a return to report
the tax under chapter 1 that includes all of
the information required on the forms and
in instructions.
(g) Severability. The provisions of this
section are separate and severable from
one another. If any provision of this sec-
tion is stayed or determined to be invalid,
it is the agencies’ intention that the remain-
ing provisions shall continue in effect.
(h) Applicability date. This section
applies to previously-owned clean vehicles
placed in service in taxable years begin-
ning after [DATE OF PUBLICATION OF
FINAL RULE].
§1.25E-3 Transfer of credit.
(a) In general. This section provides
a credit transfer program under section
25E(f).
(b) Definitions. This paragraph (b) pro-
vides definitions that apply for purposes
of section 25E(f) and this section.
(1) Advance payment program.
Advance payment program means the pro-
gram described in paragraph (f)(1) of this
section.
(2) Dealer. Dealer has the meaning
provided in §1.25-1(b)(1).
(3) Dealer tax compliance. Dealer
tax compliance means that all required
Federal information and tax returns of
the dealer have been filed, including for
Federal income and employment tax
purposes, and all Federal tax, penalties,
and interest due of the dealer as of the
time of sale have been paid. A dealer that
has entered into an installment agreement
with the IRS for which a dealer is current
on its obligations is treated as being in
dealer tax compliance.
(4) Electing taxpayer. Electing tax-
payer means the individual who purchases
the previously-owned clean vehicle and
elects to transfer the section 25E credit
that would otherwise be allowable to such
individual to an eligible entity pursuant to
section 25E(f) and the rules of this section.
A taxpayer is an electing taxpayer only if
the taxpayer makes certain attestations
to the registered dealer, pursuant to pro-
cedures provided in guidance published
in the Internal Revenue Bulletin, includ-
ing that the taxpayer does not anticipate
exceeding the modified adjusted gross
income limitations.
(5) Eligible entity. Eligible entity has
the meaning provided in section 30D(g)
(2) and paragraph (f)(2) of this section.
(6) Registered dealer. Registered
dealer is a dealer that has completed reg-
istering with the IRS as provided in para-
graph (c) of this section.
(7) Time of sale. Time of sale means the
date the previously-owned clean vehicle
is placed in service, as defined in §1.25E-
1(b)(4).
(8) Vehicle transfer election. Vehicle
transfer election has the meaning pro-
vided in sections 25E(f) and 30D(g) and
paragraph (d) of this section.
(c) Dealer registration—(1) In gen-
eral. A dealer must first register with the
IRS in the manner set forth in guidance
published in the Internal Revenue Bulletin
(see §601.601(d)(2)(ii)(a) of this chapter)
for the dealer to receive credits transferred
by an electing taxpayer pursuant to section
25E(f) and paragraph (d) of this section.
(2) Effect of dealer tax non-compli-
ance. If the dealer is not in dealer tax
compliance for any of the taxable periods
during the last five taxable years, then the
dealer may complete its initial registra-
tion with the IRS, but the dealer will not
be eligible for the advance payment pro-
gram (and, therefore, the dealer will not
be eligible to receive transferred section
25E credits) until the compliance issue is
resolved. The IRS will notify the dealer in
writing that the dealer is not in dealer tax

October 23, 2023 1166 Bulletin No. 2023–43
compliance, and the dealer will have the
opportunity to address any failure through
regular procedures. If the failure is cor-
rected, the IRS will complete the dealer’s
registration for the advance payment pro-
gram, and, provided all other requirements
of this section are met, the dealer will then
be allowed to participate in the advance
payment program. Additional procedural
guidance regarding this paragraph (c)(2)
will be set forth in guidance published in
the Internal Revenue Bulletin.
(d) Vehicle transfer election by electing
taxpayer to transfer credit. For a previ-
ously-owned clean vehicle placed in ser-
vice after December 31, 2023, an electing
taxpayer may elect to apply the rules of
section 25E(f) and this section to make a
vehicle transfer election with respect to
the vehicle, so that the 25E credit with
respect to the vehicle is allowed to the
eligible entity specified in the vehicle
transfer election (and not to the taxpayer)
pursuant to the advance payment pro-
gram described in paragraph (f) of this
section. The electing taxpayer, as part of
the vehicle transfer election, must trans-
fer the entire amount of the section 25E
credit that would otherwise be allowable
to the electing taxpayer with respect to the
vehicle, and the eligible entity specified in
the vehicle transfer election must pay the
electing taxpayer an amount equal to the
amount of the credit included in the vehi-
cle transfer election. A vehicle transfer
election is made no later than at the time
of sale in the manner set forth in guidance
published in the Internal Revenue Bulletin
(see §601.601(d)(2)(ii)(a) of this chapter),
and, once made the vehicle transfer elec-
tion is irrevocable.
(e) Federal income tax consequences
of the vehicle transfer election—(1)
Treatment of electing taxpayer. In the case
of a vehicle transfer election, the Federal
income tax consequences for the electing
taxpayer are as follows—
(i) The amount of the section 25E
credit that the electing taxpayer elects to
transfer to the eligible entity under section
30D(g) (by reason of section 25E(f)) and
paragraph (d) of this section may exceed
the electing taxpayer’s regular tax liabil-
ity (as defined in section 26(b)(1) of the
Code) for the taxable year in which the
sale occurs, and the excess, if any, is not
subject to recapture;
(ii) The payment made by an eligible
entity to an electing taxpayer under sec-
tion 30D(g)(2)(C) (by reason of 25E(f))
and paragraph (d) of this section to an
electing taxpayer pursuant to a vehicle
transfer election is not includible in the
gross income of the electing taxpayer; and
(iii) The payment made by an eligible
entity under section 30D(g)(2)(C) (by
reason of section 25E(f)) and paragraph
(d) of this section is treated as repaid by
the electing taxpayer to the eligible entity
as part of the purchase price of the pre-
viously-owned clean vehicle. Thus, the
repayment by the electing taxpayer is part
of the electing taxpayer’s basis in the pre-
viously-owned clean vehicle prior to the
application of the basis reduction rule of
section 30D(f)(1) that applies by reason of
section 25E(e) and §1.25E-2(a).
(2) Treatment of eligible entity. In the
case of a vehicle transfer election, the
Federal income tax consequences for the
eligible entity are as follows—
(i) The eligible entity is allowed the
section 25E credit with respect to the
previously-owned clean vehicle and may
receive an advance payment pursuant to
section 30D(g)(7) (by reason of section
25(f)) and paragraph (f) of this section;
(ii) Advance payments received by
the eligible entity are not treated as a tax
credit in the hands of the eligible entity
and may exceed the eligible entity’s reg-
ular tax liability (as defined in section
26(b)(1)) for the taxable year in which
the sale occurs;
(iii) An advance payment received by
the eligible entity is not included in the
gross income of the eligible entity;
(iv) The payment made by an eligible
entity under section 30D(g)(2)(C) (by rea-
son of section 25(f)) and paragraph (d) of
this section to an electing taxpayer is not
deductible by the eligible entity; and
(v) The payment made by an eligible
entity to the electing taxpayer under sec-
tion 30D(g)(2)(C) (by reason of section
25(f)) and paragraph (d) of this section is
treated as paid by the electing taxpayer to
the eligible entity as part of the purchase
price of the previously-owned clean vehi-
cle. Thus, the repayment by the electing
taxpayer is treated as an amount realized
of the eligible entity under section 1001
of the Code and the regulations in this part
under section 1001.
(vi) If the eligible entity is a partner-
ship or an S corporation, then—
(A) The IRS will make the advance
payment to such partnership or S corpo-
ration equal to the amount of the section
25E credit allowed that is transferred to
the eligible entity;
(B) Such section 25E credit is reduced
to zero and is, for any other purpose of the
Code, deemed to have been allowed solely
to such entity (and not allocated or other-
wise allowed to its partners or sharehold-
ers) for such taxable year; and
(C) The amount of the advance pay-
ment is not treated as tax exempt income
to the partnership or S corporation for pur-
poses of the Code.
(3) Form of payment from eligible
entity to electing taxpayer. The tax treat-
ment of the payment made by the eligible
entity to the electing taxpayer described
in paragraphs (e)(1) and (2) of this sec-
tion is the same regardless of whether the
payment is made in cash or in the form
of a partial payment or down payment for
purchase of the previously-owned clean
vehicle.
(4) Application of certain other
requirements. In the case of a vehicle
transfer election, the following additional
rules apply –
(i) The requirements of section 30D(f)
(1) (regarding basis reduction) and 30D(f)
(2) (regarding no double benefit), by rea-
son of section 25E(e), apply to the elect-
ing taxpayer as if the vehicle transfer
election were not made (so, for example,
the electing taxpayer must reduce the tax-
payer’s basis in the vehicle by the amount
of the section 25E credit, regardless of the
vehicle transfer election).
(ii) Section 30D(f)(6) (regarding the
election not to take the credit), by reason
of section 25E(e), will not apply (in other
words, by electing to transfer the credit,
the electing taxpayer is electing to take the
credit).
(iii) Section 30D(f)(9) (regarding
the vehicle identification number (VIN)
requirement), by reason of section
25E(e), and section 25E(d) (regarding
the VIN requirement) will be treated as
satisfied if the eligible entity provides
the VIN of such vehicle to the IRS in
the form and manner set forth in guid-
ance published in the Internal Revenue
Bulletin.

Bulletin No. 2023–43 1167 October 23, 2023
(5) Examples. The following examples
illustrate the rules under paragraph (e) of
this section.
(i) Example 1: Electing taxpayer’s regular tax
liability less than value of the credit—(A) Facts. A
taxpayer, who is an individual, purchases a previ-
ously-owned clean vehicle from a dealer, which is
a C corporation. The taxpayer satisfies the require-
ments to be an electing taxpayer and elects to trans-
fer the section 25E credit to the dealer. The dealer is
a registered dealer and satisfies the requirements to
be an eligible entity. The sales price the vehicle is
$24,000. The section 25E credit otherwise allowable
to the electing taxpayer is $4,000. The eligible entity
makes the payment required to be made to the elect-
ing taxpayer in the form of a cash payment of $4,000.
The electing taxpayer pays back the $4,000 to the
eligible entity and pays an additional $20,000 as the
purchase price of the vehicle. The electing taxpayer’s
regular tax liability for the year is less than $4,000.
(B) Analysis. Under paragraph (e)(1) of this sec-
tion, the electing taxpayer may transfer the credit
even though the electing taxpayer’s regular tax
liability is less than $4,000, and no amount of the
credit will be recaptured from the taxpayer on the
basis that the allowable credit exceeded their regular
tax liability. The eligible entity’s $4,000 payment to
the electing taxpayer is not included in the electing
taxpayer’s gross income, and the electing taxpayer’s
purchase price for the vehicle is $24,000 (including
both the $4,000 payment and the additional $20,000
purchase price paid), prior to the application of the
basis reduction rule of section 30D(f)(1) (by reason
of section 25E(e)). After application of the basis
reduction, the electing taxpayer’s basis in the vehicle
is $20,000. The eligible entity is eligible to receive
an advance payment of $4,000 for the transferred
section 25E credit as provided in section 30D(g)(7)
(by reason of section 25E(f)) and paragraph (f) of
this section. Under paragraph (d)(2) of this section,
the eligible entity may receive the advance payment
regardless of whether the eligible entity’s regular tax
liability is less than $4,000. The advance payment is
not treated as a credit toward the eligible entity’s tax
liability (if any), nor is it included in the eligible enti-
ty’s gross income, the eligible entity’s $4,000 pay-
ment to the electing taxpayer is not deductible, and
the eligible entity’s amount realized is $24,000 upon
the sale of the vehicle (including both the $4,000
payment and the additional $20,000 purchase price
of the vehicle).
(ii) Example 2: Non-cash payment by eligible
entity to electing taxpayer—(A) Facts. The facts are
the same as in paragraph (e)(5)(i)(A) of this section
(facts of Example 1), except that the eligible entity
makes the payment to the electing taxpayer in the
form of a reduction in the purchase price (rather than
as a cash payment).
(B) Analysis. Paragraph (e)(3) of this section pro-
vides that the application of paragraphs (e)(1) and
(2) of this section is not dependent on the form of
payment from an eligible entity to an electing tax-
payer (for example, a payment in cash or a payment
in the form of a reduction in purchase price). Thus,
the analysis is the same as in paragraph (e)(5)(i)(B)
of this section (analysis of Example 1).
(iii) Example 3: Eligible entity is a partnership—
(A) Facts. The facts are the same as in paragraph (e)
(5)(i)(A) of this section (facts of Example 1), except
that the dealer is a partnership.
(B) Analysis. The analysis as to the electing tax-
payer is the same as in paragraph (e)(5)(i)(B) of this
section (analysis of Example 1). Because the eligible
entity is a partnership, paragraph (e)(2)(vi) of this
section applies. Thus, the advance payment is made
to the partnership, the credit is reduced to zero and
is, for any other purpose of the Code, deemed to have
been allowed solely to the partnership (and not allo-
cated or otherwise allowed to its partners) for such
taxable year. The amount of the advance payment is
not treated as tax exempt income to the partnership
for purposes of the Code.
(f) Advance payments received by eli-
gible entities—(1) In general. An eligi-
ble entity may receive advance payments
from the IRS corresponding to the amount
of the section 25E credit for which an
election was made by an electing taxpayer
to transfer the credit to the eligible entity
pursuant to section 30D(g) (by reason of
section 25E(f)) and paragraph (d) of this
section before the eligible entity files its
Federal income tax return for the tax-
able year that includes the taxable year
with respect to which the vehicle transfer
election corresponds. This advance pay-
ment program is the exclusive mechanism
for an eligible entity to receive the sec-
tion 25E credit transferred under section
25E(f) pursuant to paragraph (d) of this
section. An eligible entity receiving an
advance payment may not claim the sec-
tion 25E credit on a Federal income tax
return.
(2) Requirements for a registered
dealer to become an eligible entity. A
registered dealer qualifies as an eligi-
ble entity, and may therefore receive an
advance payment, by meeting the follow-
ing requirements—
(i) The registered dealer submits all
required registration information and is in
dealer tax compliance.
(ii) The registered dealer retains infor-
mation regarding the vehicle transfer elec-
tion for three calendar years beginning
with the year immediately after the year
in which the vehicle is placed in service,
as described in guidance published in the
Internal Revenue Bulletin (see §601.601
of this chapter).
(iii) The eligible entity meets any other
requirements of section 25E(f) by refer-
ence to section 30D(g) and this section
included in guidance published in the
Internal Revenue Bulletin (see §601.601 of
this chapter) or in forms and instructions.
(3) Suspension of registered dealer
eligibility. A registered dealer may be sus-
pended from the advance payment pro-
gram pursuant to the procedures described
in guidance published in the Internal
Revenue Bulletin (see §601.601 of this
chapter). Any decision made by the IRS
relating to the suspension of a dealer’s
registration is not subject to administra-
tive appeal to the IRS Independent Office
of Appeals unless the IRS and the IRS
Independent Office of Appeals agree that
such review is available and the IRS pro-
vides the time and manner for such review.
(4) Revocation of registered dealer eli-
gibility. A registered dealer’s registration
may be revoked pursuant to the procedures
described in guidance published in the
Internal Revenue Bulletin (see §601.601
of this chapter). Any decision made by the
IRS relating to the revocation of a deal-
er’s registration is not subject to admin-
istrative appeal to the IRS Independent
Office of Appeals unless the IRS and the
IRS Independent Office of Appeals agree
that such review is available and the IRS
provides the time and manner for such
review.
(g) Increase in tax—(1) Recapture
where taxpayer exceeds modified adjusted
gross income limitation. If a taxpayer who
elected to transfer the credit under sec-
tion 25E(f) and this section has modified
adjusted gross income that exceeds the
limitation in section 25E(b), the income
tax imposed on such taxpayer under chap-
ter 1 of the Code (chapter 1) for the tax-
able year in which the vehicle was placed
in service is increased by the amount of
the payment received by the taxpayer. The
taxpayer must reconcile such amounts on
the tax return described in paragraph (h)
of this section.
(2) Excessive payments—(i) In gen-
eral. This paragraph (g)(2) provides rules
under section 25E(f) by reference to sec-
tion 30D(g)(7)(B), under which rules sim-
ilar to the rules of section 6417(d)(6) of
the Code apply to the advance payment
program. In the case of any advance pay-
ment that the IRS determines constitutes an
excessive payment, the tax imposed on the
eligible entity under chapter 1, regardless
of whether such entity would otherwise
be subject to tax under chapter 1, for the
taxable year in which such determination is
made will be increased by the sum of:

October 23, 2023 1168 Bulletin No. 2023–43
(A) The amount of the excessive pay-
ment; plus
(B) An amount equal to 20 percent of
such excessive payment.
(ii) Reasonable cause. The amount
described in paragraph (g)(2)(i)(B) of this
section will not apply to an eligible entity
if the eligible entity demonstrates to the
satisfaction of the IRS that the excessive
payment resulted from reasonable cause.
In the case of a vehicle returned to the
eligible entity within 30 days of placing
the vehicle in service for which a vehicle
transfer election was made by the electing
taxpayer, as described in §1.25E-2(c)(1)
(ii), the eligible entity will be treated as
demonstrating reasonable cause.
(iii) Excessive payment defined.
Excessive payment means an advance
payment made—
(A) To a registered dealer that fails to
meet the requirements to be an eligible
entity provided in paragraph (f)(2) of this
section; or
(B) Except as provided in paragraph (g)
(2)(iv) of this section, to an eligible entity
with respect to a vehicle to the extent the
payment exceeds the amount of the credit
that, without application of section 25E(f)
and this section, would be otherwise
allowable to the electing taxpayer with
respect to the vehicle for such tax year.
(iv) Special rule for cases in which
the purchaser’s modified adjusted gross
income exceeds the limitation. Any excess
described in paragraph (g)(2)(iii)(B) of
this section due to the purchaser exceeding
the limitation based on modified adjusted
gross income provided in section 25E(b)
is not an excessive payment. Instead, the
value of the amount of the advance pay-
ment is recaptured from the purchaser
under section 25E(e) and paragraph (g)(1)
of this section.
(3) Example. This paragraph (g)(3)
provides an example to illustrate the
excessive payment rules provided in para-
graph (g)(2) of this section.
(i) Facts. In 2024, D, a registered dealer, receives
an advance payment of $4,000 with respect to a
credit transferred under section 25E(f)(1) and para-
graph (d) of this section with respect to a previous-
ly-owned clean vehicle. In 2025, the IRS determines
that the registered dealer was not an eligible entity
with respect to the vehicle at the time of the receipt
of the advance payment in 2024 because the regis-
tered dealer failed to satisfy a requirement in section
30D(g)(2) (applicable by reason of section 25E(f))
and paragraph (f)(2) of this section to be an eligible
entity with respect to the vehicle. D is unable to show
reasonable cause for the failure.
(ii) Analysis. Under paragraph (g)(2)(i) of this
section, the tax imposed on D is increased by the
amount of the excessive payment if the advance
payment received by D constitutes an excessive
payment. Under paragraph (g)(2)(iii) of this section,
the entire amount of the $4,000 advance payment
received by D is an excessive payment because D
did not meet the requirements to be an eligible entity
under section 30D(g)(2) (applicable by reason of
section 25E(f)) and paragraph (g)(2) of this section.
Additionally, because D cannot show reasonable
cause for its failure to meet these requirements, the
tax imposed under chapter 1 on D is increased by
$4,800 in 2025 (the taxable year of the IRS deter-
mination). This is comprised of the $4,000 value of
the credit plus the $800 penalty, calculated as 20%
penalty on such $4,000 (20% * $4,000 = $800). This
treatment applies regardless of whether D is other-
wise subject to tax under chapter 1 (for example, if
D is a partnership).
(h) Requirement of return—(1) In
general. An electing taxpayer that makes
a vehicle transfer election must file an
income tax return for the taxable year
in which the vehicle transfer election is
made and indicate such election on the
return per instructions. The electing tax-
payer must include the VIN of the new
clean vehicle on such return, as provided
for in forms and instructions.
(2) Income tax return. For purposes of
this section, the term income tax return
means a Form 1040, U.S. Individual
Income Tax Return, with an attached
Form 8936, Clean Vehicle Credits, or
successor forms, or any other forms,
schedules, or statements prescribed by
the Commissioner for the purpose of mak-
ing a return to report the tax under chap-
ter 1 that includes all of the information
required on the forms and in instructions.
(i) Two vehicle transfer elections per
year. A taxpayer may make no more than
two transfer elections per taxable year,
consisting of either two section 30D
credits or one section 30D credit and one
section 25E credit. In the case of a joint
return, each individual taxpayer may
make no more than two transfer elections
per taxable year.
(j) Severability. The provisions of this
section are separate and severable from
one another. If any provision of this sec-
tion is stayed or determined to be invalid,
it is the agency’s intention that the remain-
ing provisions will continue in effect.
(k) Applicability date. This section
applies to taxable years ending after
December 31, 2023.
Par 3. Section 1.30D-0, as proposed to
be added at 88 FR 23370 (April 17, 2023),
is amended by:
1. Adding entry (j) to §1.30D-2;
2. In §1.30D-4:
i. Revising the heading; and
ii. Adding entries (f), (f)(1), (f)(1)(i)
through (iv), (f)(2), (g), and (h); and
3. Adding an entry in numerical order
for §1.30D-5.
The revisions and additions read as
follows:
§1.30D-0 Table of contents.
* * * * *
§1.30D-2 Definitions for purposes of
section 30D.
* * * * *
(j) Seller report.
* * * * *
§1.30D-4 Special rules.
* * * * *
(f) Recapture rules.
(1) In general.
(i) Cancelled sale.
(ii) Vehicle return.
(iii) Resale.
(iv) Other vehicle returns and resales.
(2) Recapture rules in the case of a
vehicle transfer election.
(g) Seller registration.
(h) Requirement to file a complete
income tax return.
§1.30D-5 Transfer of credit and
recapture.
(a) Definitions.
(1) Advance payment program.
(2) Dealer.
(3) Dealer tax compliance.
(4) Electing taxpayer.
(5) Eligible entity.
(6) Registered dealer.
(7) Time of sale.
(8) Vehicle registration election.
(b) Dealer registration.
(1) In general.
(2) Effect of dealer tax non-compliance.
(c) Election by electing taxpayer to
transfer credit.

Bulletin No. 2023–43 1169 October 23, 2023
(d) Federal income tax consequences
of the vehicle transfer election.
(1) Treatment of electing taxpayer.
(2) Treatment of eligible entity.
(3) Form of payment from eligible
entity to electing taxpayer.
(4) Application of certain other
requirements.
(5) Examples.
(e) Advance payments received by eli-
gible entities.
(1) In general.
(2) Requirements for a registered
dealer to become an eligible entity.
(3) Suspension of registered dealer
eligibility.
(4) Revocation of registered dealer
eligibility.
(f) Increase in tax.
(1) Recapture where taxpayer exceeds
modified adjusted gross income limitation.
(2) Excessive payments.
(i) In general.
(ii) Reasonable cause.
(iii) Excessive payment defined.
(iv) Special rule for cases in which
the purchaser’s modified adjusted gross
income exceeds the limitation.
(3) Example.
(g)Requirement of return.
(1) In general.
(2) Income tax return.
(h) Two vehicle transfer elections per year.
(i) Severability.
(j) Applicability date.
Par 4. Section 1.30D-2, as proposed to
be added at 88 FR 23370 (April 17, 2023),
is amended by adding paragraph (j) to
read as follows:
§1.30D-2 Definitions for purposes of
section 30D.
* * * * *
(j) Seller report. Seller report means
the report described in section 30D(d)(1)
(H) and provided by the seller of a vehicle
to the taxpayer and the IRS in the man-
ner provided in, and containing the infor-
mation described in, guidance published
in the Internal Revenue Bulletin (see
§601.601(d)(2)(ii)(a) of this chapter). The
seller report must be provided to the IRS
electronically. The term seller report does
not include a report rejected by the IRS
due to the information contained therein
not matching IRS records.
Par 5. Section 1.30D-4, as proposed
to be added at 88 FR 23370 (April 17,
2023), is amended by adding paragraphs
(f) through (h) to read as follows:
§1.30D-4 Special rules.
* * * * *
(f) Recapture rules—(1) In general.
This paragraph (f) provides rules under
section 30D(f)(5) regarding the recapture
of the section 30D credit.
(i) Cancelled sale. If the sale of a vehi-
cle between the taxpayer and seller is
cancelled before the taxpayer places the
vehicle in service, then—
(A) The taxpayer may not claim the
section 30D credit with respect to the
vehicle;
(B) The sale will be treated as not
having occurred and the vehicle will be
considered available for original use by
another taxpayer (regardless of the can-
celled sale), and the vehicle will, there-
fore, still be eligible for the section 30D
credit;
(C) The seller report must be rescinded
by the seller in the manner set forth
in guidance published in the Internal
Revenue Bulletin (see §601.601(d)(2)(ii)
(a) of this chapter); and
(D) The taxpayer cannot make a vehi-
cle transfer election under section 30D(g)
and §1.30D-5(c) with respect to the can-
celled sale.
(ii) Vehicle return. If a taxpayer returns
to the seller a vehicle within 30 days of
placing such vehicle in service, then—
(A) The taxpayer cannot claim the sec-
tion 30D credit with respect to the vehicle;
(B) The vehicle will no longer be
considered available for original use by
another taxpayer, and, therefore, the vehi-
cle will no longer be eligible for the sec-
tion 30D credit;
(C) The seller report must be updated
by the seller; and
(D) A vehicle transfer election under
30D(g) and §1.
30D-5(c), if applicable,
will be treated as nullified and any advance
payment made pursuant to section 30D(g)
and §1.30D-5(e) will be collected from
the eligible entity as an excessive payment
pursuant to §1.30D-5(f).
(iii) Resale. If a taxpayer resells the
vehicle within 30 days of placing the vehi-
cle in service, then the taxpayer is treated
as having purchased the new clean vehicle
with the intent to resell, and—
(A) The taxpayer cannot claim the sec-
tion 30D credit with respect to the vehicle;
(B) The vehicle will no longer be
considered available for original use by
another taxpayer, and, therefore, the vehi-
cle will no longer be eligible for the sec-
tion 30D credit;
(C) The seller report will not be
updated;
(D) A vehicle transfer election under
30D(g) and §1.30D-5(c), if applicable,
will remain in effect and any advance pay-
ment made pursuant to section 30D(g) and
§1.30D-5(e) will not be collected from the
eligible entity; and
(E) The value of any transferred credit
will be collected from the taxpayer.
(iv) Other vehicle returns and resales.
In the case of a vehicle return not described
in paragraph (f)(1)(ii) of this section or a
resale not described in paragraph (f)(1)
(iii) of this section, the vehicle will no
longer be considered available for original
use by another taxpayer, and, therefore,
the vehicle will no longer be eligible for
the section 30D credit.
(2) Recapture rules in the case of a vehi-
cle transfer election. For additional recap-
ture rules that apply in the case of a vehicle
transfer election, see §1.30D-5(f)(1). For
excessive payment rules that apply in the
case where an advance payment is made to
an eligible entity, see §1.30D-5(f)(2).
(g) Seller registration. A seller must
first register with the IRS in the manner set
forth in guidance published in the Internal
Revenue Bulletin (see §601.601(d)(2)(ii)
(a) of this chapter) for purposes of filing
seller reports.
(h) Requirement to file a complete
income tax return. No section 30D credit
is allowed unless the taxpayer claiming
such credit files an income tax return for
the taxable year in which the new clean
vehicle is placed in service. For purpose
of this paragraph (h), the term income tax
return means a Form 1040, U.S. Individual
Income Tax Return, with an attached Form
8936, Clean Vehicle Credits, or successor
forms, and any additional forms, sched-
ules, or statements prescribed by the
Commissioner for the purpose of mak-
ing a return to report the tax under chap-
ter 1 that includes all of the information
required on the forms and in instructions.

October 23, 2023 1170 Bulletin No. 2023–43
Par 6. Section 1.30D-5 is added to read
as follows:
§1.30D-5 Transfer of credit and
recapture.
(a) Definitions. This paragraph (a) pro-
vides definitions that apply for purposes
of section 30D(g) and this section.
(1) Advance payment program.
Advance payment program means the pro-
gram described in paragraph (e)(1) of this
section.
(2) Dealer. Dealer has the meaning
provided in section 30D(g)(8), except
that, for purposes of this section, the term
does not include persons licensed solely
by a territory of the United States, and
includes a dealer licensed in any jurisdic-
tion (other than one licensed solely by a
territory of the United States) that makes
sales at sites outside of the jurisdiction in
which its licensed.
(3) Dealer tax compliance. Dealer
tax compliance means that all required
Federal information and tax returns of
the dealer have been filed, including for
Federal income and employment tax pur-
poses, and all Federal tax, penalties, and
interest due of the dealer as of the time
of sale have been paid. A dealer who has
entered into an installment agreement with
the Internal Revenue Service (IRS) for
which a dealer is current on its obligations
is treated as in Dealer tax compliance.
(4) Electing taxpayer. Electing tax-
payer means the individual who pur-
chases and places in service a new clean
vehicle and elects to transfer the credit
under section 30D that would otherwise
be allowable to such individual to an eli-
gible entity pursuant to section 30D(g)
and paragraph (c) of this section. A tax-
payer is an electing taxpayer only if the
taxpayer make certain attestations to the
registered dealer, pursuant to procedures
provided in guidance published in the
Internal Revenue Bulletin, including that
the taxpayer does not anticipate exceeding
the modified adjusted gross income lim-
itations and that the taxpayer will use the
vehicle predominantly for personal use.
(5) Eligible entity. Eligible entity has
the meaning provided in section 30D(g)
(2) and paragraph (e)(2) of this section.
(6) Registered dealer. A registered
dealer is a dealer that has completed
registration with the IRS as provided in
paragraph (b) of this section.
(7) Time of sale. Time of sale means
the date the new clean vehicle is placed in
service. A new clean vehicle is placed in
service on the date the electing taxpayer
takes possession of the vehicle.
(8) Vehicle transfer election. Vehicle
transfer election has the meaning pro-
vided in section 30D(g) and paragraph (c)
of this section.
(b) Dealer registration—(1) In gen-
eral. A dealer must first register with the
IRS in the manner set forth in guidance
published in the Internal Revenue Bulletin
(see §601.601(d)(2)(ii)(a) of this chapter)
for the dealer to receive credits transferred
by an electing taxpayer pursuant to section
30D(g) and paragraph (c) of this section.
(2) Effect of dealer tax non-compli-
ance. If the dealer is not in dealer tax
compliance for any of the taxable peri-
ods during the last five taxable years, the
dealer may complete its initial registra-
tion with the IRS, but the dealer will not
be eligible for the advance payment pro-
gram (and, therefore, the dealer will not
be eligible to receive transferred section
30D credits) until the compliance issue
is resolved. If the failure is corrected, the
IRS will complete the dealer’s registration
for the advance payment program, and,
provided all other requirements of section
30D(g) and this section are met, the dealer
will then be allowed to participate in the
advance payment program. Additional
procedural guidance regarding this para-
graph (b)(2) will be set forth in guid-
ance published in the Internal Revenue
Bulletin.
(c) Vehicle transfer election by electing
taxpayer to transfer credit. For a new clean
vehicle placed in service after December
31, 2023, an electing taxpayer may elect to
apply the rules of section 30D(g) and this
section to make a vehicle transfer election
with respect to the vehicle so that the sec-
tion 30D credit with respect to the vehicle
is allowed to the eligible entity specified in
the vehicle transfer election (and not to the
electing taxpayer) pursuant to the advance
payment program described in paragraph
(e) of this section. The electing taxpayer,
as part of the vehicle transfer election,
must transfer the entire amount of the
credit that would otherwise be allowable
to the electing taxpayer under section 30D
with respect to the vehicle, and the eligi-
ble entity specified in the vehicle transfer
election must pay the electing taxpayer an
amount equal to the amount of the credit
included in the vehicle transfer election. A
vehicle transfer election is made not later
than at the time of sale in the manner set
forth in guidance published in the Internal
Revenue Bulletin, and, once made, the
vehicle transfer election is irrevocable.
No vehicle transfer election may be made
to transfer an amount of credit that would
otherwise be allowed to the electing tax-
payer under section 38.
(d) Federal income tax consequences
of the vehicle transfer election—(1)
Treatment of electing taxpayer. In the case
of a vehicle transfer election, the Federal
income tax consequences for the electing
taxpayer are as follows—
(i) The credit amount under section
30D that the electing taxpayer elects to
transfer to the eligible entity under section
30D(g) and paragraph (c) of this section
may exceed the electing taxpayer’s regu-
lar tax liability (as defined in section 26(b)
(1) of the Code) for the taxable year in
which the sale occurs, and the excess, if
any, is not subject to recapture.
(ii) The payment made by an eligible
entity to an electing taxpayer under sec-
tion 30D(g)(2)(C) and paragraph (c) of
this section to an electing taxpayer pursu-
ant to the vehicle transfer election is not
includible in the gross income of the elect-
ing taxpayer.
(iii) The payment made by an eligi-
ble entity to an electing taxpayer under
section 30D(g)(2)(C) and paragraph (c)
of this section is treated as repaid by the
electing taxpayer to the eligible entity as
part of the purchase price of the new clean
vehicle. Thus, the repayment by the elect-
ing taxpayer is included in the electing
taxpayer’s basis in the new clean vehicle
prior to the application of the basis reduc-
tion rule in section 30D(f)(1).
(2) Treatment of eligible entity. In the
case of a vehicle transfer election, the
Federal income tax consequences for the
eligible entity are as follows—
(i) The eligible entity is allowed the
credit under section 30D with respect to
the new clean vehicle and may receive
an advance payment pursuant to sec-
tion 30D(g)(7) and paragraph (e) of this
section;

Bulletin No. 2023–43 1171 October 23, 2023
(ii) Advance payments received by the
eligible entity are not treated as a tax credit
in the hands of the eligible entity and may
exceed the eligible entity’s regular tax lia-
bility (as defined in section 26(b)(1)) for
the taxable year in which the sale occurs;
(iii) An advance payment received by
the eligible entity is not included in the
gross income of the eligible entity;
(iv) The payment made by an eligible
entity under section 30D(g)(2)(C) and
paragraph (c) of this section to an electing
taxpayer is not deductible by the eligible
entity;
(v) The payment made by an eligible
entity to an electing taxpayer under sec-
tion 30D(g)(2)(C) and paragraph (c) of
this section is treated as repaid by the
electing taxpayer to the eligible entity as
part of the purchase price of the new clean
vehicle. Thus, the repayment by the elect-
ing taxpayer is treated as an amount real-
ized of the eligible entity under section
1001 of the Code and the regulations in
this part under section 1001; and
(vi) If the eligible entity is a partner-
ship or an S corporation, then—
(A) The IRS will make the advance
payment to such partnership or S corpo-
ration equal to the amount of the section
30D credit allowed that is transferred to
the eligible entity;
(B) Such section 30D credit is reduced
to zero and is, for any other purpose of the
Code, deemed to have been allowed solely
to such entity (and not allocated or other-
wise allowed to its partners or sharehold-
ers) for such taxable year; and
(C) The amount of the advance pay-
ment is not treated as tax exempt income
to the partnership or S corporation for pur-
poses of the Code.
(3) Form of payment from eligible
entity to electing taxpayer. The tax treat-
ment of the payment made by the eligible
entity to the electing taxpayer described in
paragraphs (d)(1) and (2) of this section
is the same regardless of whether the pay-
ment is made in cash or in the form of a
partial payment or down payment for pur-
chase of the new clean vehicle.
(4) Application of certain other
requirements. In the case of a vehicle
transfer election, the following additional
rules apply—
(i) The requirements of section 30D(f)
(1) (regarding basis reduction) and 30D(f)
(2) (regarding no double benefit) apply to
the electing taxpayer as if the vehicle trans-
fer election were not made (so, for exam-
ple, the electing taxpayer must reduce its
basis in the vehicle by the amount of the
section 30D credit, regardless of the vehi-
cle transfer election);
(ii) Section 30D(f)(6) (regarding the
election not to take the credit) will not
apply (in other words, by electing to
transfer the credit, the electing taxpayer is
electing to take the credit); and
(iii) Section 30D(f)(9) (regarding the
VIN requirement) will be treated as satis-
fied if the eligible entity provides the vehi-
cle identification number of such vehicle
to the IRS in the form and manner set
forth in guidance published in the Internal
Revenue Bulletin.
(5) Examples. The following examples
illustrate the rules under paragraph (d) of
this section.
(i) Example 1: Electing taxpayer’s regular tax
liability less than value of the credit—(A) Facts.
A taxpayer, who is an individual, purchases a new
clean sports utility vehicle from a dealer that is a C
corporation. The taxpayer satisfies the requirements
to be an electing taxpayer and elects to transfer the
section 30D credit to the dealer. The dealer is a reg-
istered dealer and satisfies the requirements to be an
eligible entity. The purchase price for the vehicle is
$57,500. The credit otherwise allowable to the elect-
ing taxpayer by section 30D with respect to the vehi-
cle is $7,500. The eligible entity makes the payment
required to be made to the electing taxpayer in the
form of a cash payment of $7,500. The electing tax-
payer pays back the $7,500 to the eligible entity and
pays an additional $50,000 as the purchase price of
the vehicle. The electing taxpayer’s regular tax lia-
bility for the year is less than $7,500.
(B) Analysis. Under paragraph (d)(1) of this sec-
tion, the electing taxpayer may transfer the credit
even though the electing taxpayer’s regular tax
liability is less than $7,500, and no amount of the
credit will be recaptured from the taxpayer on the
basis that the allowable credit exceeded their regular
tax liability. The eligible entity’s $7,500 payment to
the electing taxpayer is not included in the electing
taxpayer’s gross income, and the electing taxpayer’s
purchase price for the vehicle is $57,500 (including
both the $7,500 payment and the additional $50,000
purchase price paid), prior to the application of
the basis reduction rule of section 30D(f)(1). After
application of the basis reduction, the electing tax-
payer’s basis in the vehicle is $50,000. The eligi-
ble entity is eligible to receive an advance payment
of $7,500 for the transferred section 30D credit as
provided in section 30D(g)(7) and paragraph (e) of
this section. Under paragraph (d)(2) of this section,
the eligible entity may receive the advance payment
regardless of whether the eligible entity’s regular
tax liability is less than $7,500. The advance pay-
ment is not treated as a credit toward the eligible
entity’s tax liability (if any), nor is it included in
the eligible entity’s gross income, the eligible enti-
ty’s $7,500 payment to the electing taxpayer is not
deductible, and the eligible entity’s amount realized
is $57,500 upon the sale of the vehicle (including
both the $7,500 payment and the additional $50,000
purchase price of the vehicle).
(ii) Example 2: Non-cash payment by eligible
entity to electing taxpayer—(A) Facts. The facts are
the same as in paragraph (d)(5)(i)(A) of this section
(facts of Example 1), except that the eligible entity
makes the payment to the electing taxpayer in the
form of a reduction in the purchase price (rather than
as a cash payment).
(B) Analysis. Paragraph (d)(3) of this section
provides that the application of paragraphs (d)(1)
and (2) of this section is not dependent on the form
of payment from an eligible entity to an electing tax-
payer (for example, a payment in cash or a payment
in the form of a reduction in purchase price). Thus,
the analysis is the same as in paragraph (d)(5)(i)(B)
of this section (analysis of Example 1).
(iii) Example 3: Eligible entity is a partnership—
(A) Facts. The facts are the same as in paragraph (d)
(5)(i)(A) of this section (facts of Example 1), except
that the dealer is a partnership.
(B) Analysis. The analysis as to the electing tax-
payer is the same as in paragraph (d)(5)(i)(B) of this
section (analysis of Example 1). Because the eligible
entity is a partnership, paragraph (d)(2)(vi) of this
section applies. Thus, the advance payment is made
to the partnership, the credit is reduced to zero and
is, for any other purpose of the Code, deemed to have
been allowed solely to the partnership (and not allo-
cated or otherwise allowed to its partners) for such
taxable year. The amount of the advance payment is
not treated as tax exempt income to the partnership
for purposes of the Code.
(e) Advance payments received by eli-
gible entities—(1) In general. An eligi-
ble entity may receive advance payments
from the IRS corresponding to the amount
of the section 30D credit for which a vehi-
cle transfer election was made by an elect-
ing taxpayer to the eligible entity pursuant
to section 30D(g) and paragraph (c) of this
section before the eligible entity files its
Federal income tax return for the taxable
year that includes the taxable year with
respect to which the vehicle transfer elec-
tion corresponds. This advance payment
program is the exclusive mechanism for
an eligible entity to receive any payment
related to a section 30D credit pursuant to
section 30D(g) and paragraph (c) of this
section. The eligible entity may not claim
a section 30D credit on a Federal income
tax return.
(2) Requirements for a registered
dealer to become an eligible entity. A
registered dealer qualifies as an eligi-
ble entity, and may therefore receive an
advance payment, by meeting the follow-
ing requirements—

October 23, 2023 1172 Bulletin No. 2023–43
(i) The registered dealer submits
required registration information and is in
dealer tax compliance;
(ii) The registered dealer retains infor-
mation regarding the vehicle transfer elec-
tion for three calendar years beginning
with the year immediately after the year
in which the vehicle is placed in service,
as described in guidance published in the
Internal Revenue Bulletin (see §601.601
of this chapter); and
(iii) The registered dealer meets any
other requirements of section 30D(g) and
this section included in guidance pub-
lished in the Internal Revenue Bulletin
(see §601.601 of this chapter).
(3) Suspension of registered dealer
eligibility. A registered dealer may be
suspended from the advance payment
program pursuant to the procedures as
described in guidance published in the
Internal Revenue Bulletin (see §601.601
of this chapter). Any decision made by the
IRS relating to the suspension of a deal-
er’s registration is not subject to admin-
istrative appeal to the IRS Independent
Office of Appeals unless the IRS and the
IRS Independent Office of Appeals agree
that such review is available and the IRS
provides the time and manner for such
review.
(4) Revocation of registered dealer eli-
gibility. A registered dealer’s registration
may be revoked pursuant to the procedures
as described in guidance published in the
Internal Revenue Bulletin (see §601.601
of this chapter). Any decision made by the
IRS relating to the revocation of a deal-
er’s registration is not subject to admin-
istrative appeal to the IRS Independent
Office of Appeals unless the IRS and the
IRS Independent Office of Appeals agree
that such review is available and the IRS
provides the time and manner for such
review.
(f) Increase in tax—(1) Recapture
where taxpayer exceeds modified adjusted
gross income limitation. If the section
30D credit would otherwise (but for
section 30D(g) and the rules of this sec-
tion) not be allowable to a taxpayer that
elected to transfer the credit under sec-
tion 30D(g) and this section because the
taxpayer exceeds the limitation based on
modified adjusted gross income in section
30D(f)(10), then the income tax imposed
on such taxpayer under chapter 1 of the
Code (chapter 1) for the taxable year in
which such vehicle was placed in service
is increased by the amount of the payment
received by the taxpayer. The taxpayer
must reconcile such amounts on the tax
return described in paragraph (g)(2) of
this section.
(2) Excessive payments—(i) In general.
This paragraph (f)(2) provides rules under
section 30D(g)(7)(B), under which rules
similar to the rules of section 6417(d)(6)
of the Code apply to the advance payment
program. In the case of any advance pay-
ment that the IRS determines constitutes
an excessive payment, the tax imposed on
the eligible entity under chapter 1, regard-
less of whether such entity would other-
wise be subject to tax under chapter 1, for
the taxable year in which such determina-
tion is made will be increased by the sum
of the following amounts—
(A) The amount of the excessive pay-
ment; plus
(B) An amount equal to 20 percent of
such excessive payment.
(ii) Reasonable cause. The amount
described in paragraph (f)(2)(i)(B) of this
section will not apply to an eligible entity
if the eligible entity demonstrates to the
satisfaction of the IRS that the excessive
payment resulted from reasonable cause.
In the case of a vehicle returned to the
eligible entity within 30 days of being
placed in service for which a vehicle
transfer election was made by the electing
taxpayer, as described in §1.30D-4(d)(1)
(ii), the eligible entity will be treated as
demonstrating reasonable cause.
(iii) Excessive payment defined.
Excessive payment means an advance
payment made–
(A) To a registered dealer that fails to
meet the requirements to be an eligible
entity provided in section 30D(g)(2) and
paragraph (e)(2) of this section; or
(B) Except as provided in paragraph (f)
(2)(iv) of this section, to an eligible entity
with respect to a vehicle to the extent the
payment exceeds the amount of the credit
that, without application of section 30D(g)
and this section, would be otherwise
allowable to the electing taxpayer with
respect to the vehicle for such tax year.
(iv) Special rule for cases in which
the purchaser’s modified adjusted gross
income exceeds the limitation. Any excess
described in paragraph (f)(2)(iii)(B) of
this section due to the purchaser exceeding
the limitation based on modified adjusted
gross income provided in section 30D(f)
(10) is not an excessive payment. Instead,
the value of the amount of the advance
payment is recaptured from the purchaser
under section 30D(f)(10) and paragraph
(f)(1) of this section.
(3) Example. This paragraph (f)(3) pro-
vides an example to illustrate the exces-
sive payment rules provided in paragraph
(f)(2) of this section.
(i) Facts. In 2024, D, a registered dealer, receives
an advance payment of $7,500 with respect to a credit
transferred under section 30D(g)(1) and paragraph
(c) of this section with respect to a new clean vehicle.
In 2025, the IRS determines that the registered dealer
was not an eligible entity with respect to the vehicle
at the time of the receipt of the advance payment in
2024 because the registered dealer failed to satisfy a
requirement in section 30D(g)(2) and paragraph (e)
(2) of this section to be an eligible entity with respect
to the vehicle. D is unable to show reasonable cause
for the failure.
(ii) Analysis. Under paragraph (f)(2)(i) of this
section, the tax imposed on D is increased by the
amount of the excessive payment if the advance
payment received by D constitutes an excessive
payment. Under paragraph (f)(2)(iii) of this sec-
tion, the entire amount of the $7,500 advance
payment received by D is an excessive payment
because D did not meet the requirements to be an
eligible entity under section 30D(g)(2) and para-
graph (e)(2) of this section. Additionally, because
D cannot show reasonable cause for its failure to
meet these requirements, the tax imposed under
chapter 1 on D is increased by $9,000 in 2025
(the taxable year of the IRS determination). This
is comprised of the $7,500 value of the credit plus
the $1,500 penalty, calculated as 20% penalty on
such $7,500 (20% * $7,500 = $1,500). This treat-
ment applies regardless of whether D is otherwise
subject to tax under chapter 1 (for example, if D
is a partnership).
(g) Requirement of return—(1) In
general. An electing taxpayer that makes
a vehicle transfer election must file an
income tax return for the taxable year
in which the vehicle transfer election is
made and indicate such election on the
return per instructions. The electing tax-
payer must include the VIN of the new
clean vehicle on such return, as provided
for in forms and instructions.
(2) Income tax return. For purposes of
this section, the term income tax return
means a Form 1040, U.S. Individual
Income Tax Return, with an attached
Form 8936, Clean Vehicle Credits, or
successor forms, and any additional
forms, schedules, or statements pre-
scribed by the Commissioner for the

Bulletin No. 2023–43 1173 October 23, 2023
purpose of making a return to report the
tax under chapter 1 that includes all of
the information required on the forms
and in instructions.
(h) Two vehicle transfer elections per
year. A taxpayer may make no more than
two transfer elections per taxable year,
consisting of either two section 30D
credits or one section 30D credit and one
section 25E credit. In the case of a joint
return, each individual taxpayer may
make no more than two transfer elections
per taxable year.
(i) Severability. The provisions of this
section are separate and severable from
one another. If any provision of this sec-
tion is stayed or determined to be invalid,
it is the agency’s intention that the remain-
ing provisions will continue in effect.
(j) Applicability date. This section
applies to taxable years beginning after
December 31, 2023.
PART 301—PROCEDURE AND
ADMINISTRATION
Par 7. The authority citation for part
301 is amended by adding an entry in
numerical order for §301.6213-2 to read,
in part, as follows:
Authority: 26 U.S.C. 7805.
* * * * *
Section 301.6213-2 also issued under
26 U.S.C. 6213.
* * * * *
Par 8. Section 301.6213-2 is added to
read as follows:
§301.6213-2 Omission of correct
vehicle identification number.
(a) In general. The definition of the
term mathematical or clerical error in
section 6213(g)(2) of the Internal Revenue
Code (Code) includes:
(1) Under section 6213(g)(2)(T), an
omission of a correct vehicle identifica-
tion number required under section 30D(f)
(9) of the Code (relating to credit for new
clean vehicles) to be included on a return;
(2) Under section 6213(g)(2)(U), an
omission of a correct vehicle identification
number required under section 25E(d) of
the Code (relating to credit for previous-
ly-owned clean vehicles) to be included
on a return; and
(3) Under section 6213(g)(2)(V), an
omission of a correct vehicle identification
number required under section 45W(e) of
the Code (relating to commercial clean
vehicle credit) to be included on a return.
(b) Omission of a correct vehicle iden-
tification number. For purposes of para-
graph (a) of this section, a taxpayer is
treated as having omitted a correct vehicle
identification number if:
(1) The vehicle identification num-
ber required to be reported under sec-
tion 30D(f)(9), 25E(d), or 45W(e) is not
included on the return of tax;
(2) The vehicle identification number
included on the return of tax is not that of
a vehicle eligible for a credit under section
30D, 25E, or 45W;
(3) The vehicle identification number
included on the return of tax is not that of
a vehicle eligible for a credit under section
30D, 25E, or 45W for the year in which it
is claimed;
(4) The vehicle identification number
included on the return of tax differs from
the vehicle identification number reported
to the IRS and the taxpayer under section
30D(d)(1)(H) for each new clean vehicle
placed in service during the taxable year
by the taxpayer who was issued the report;
or
(5) The vehicle identification number
included on the return of tax differs from
the vehicle identification number reported
to the IRS and the taxpayer under sec-
tion 25E(c)(1)(D)(i) for each previous-
ly-owned clean vehicle placed in service
during the taxable year by the taxpayer
who was issued the report.
(c) Applicability date. This section
applies to taxable years beginning after
December 31, 2023.
Douglas W. O’Donnell,
Deputy Commissioner for Services and
Enforcement.
(Filed by the Office of the Federal Register October
6, 2023, 8:45 a.m., and published in the issue of
the Federal Register for October 10, 2023, 88 FR
70310.)

Bulletin No. 2023–43 i October 23, 2023
Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplified describes a situation where
no change is being made in a prior 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).
Clarified is used in those instances
where the language in a prior ruling is be-
ing made clear because the language has
caused, or may cause, some confusion. It
is not used where a position in a prior rul-
ing is being changed.
Distinguished describes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modified is used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
with amplified and clarified, above).
Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transactions.
This term is most commonly used in a ruling
that lists previously published rulings that
are obsoleted because of changes in laws or
regulations. A ruling may also be obsoleted
because the substance has been included in
regulations subsequently adopted.
Revoked describes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.
Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a
period of time in separate rulings. If the
new ruling does more than restate the sub-
stance of a prior ruling, a combination of
terms is used. For example, modified and
superseded describes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previous-
ly published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.
Suspended is used in rare situations
to show that the previous published rul-
ings will not be applied pending some
future action such as the issuance of new
or amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.
Abbreviations
The following abbreviations in current
use and formerly used will appear in
material published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
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.

October 23, 2023 ii Bulletin No. 2023–43
Numerical Finding List
1
Bulletin 2023–43
Announcements:
2023-18, 2023-30 I.R.B. 366
2023-19, 2023-30 I.R.B. 367
2023-20, 2023-30 I.R.B. 368
2023-17, 2023-31 I.R.B. 412
2023-21, 2023-31 I.R.B. 413
2023-22, 2023-32 I.R.B. 429
2023-23, 2023-34 I.R.B. 569
2023-24, 2023-35 I.R.B. 661
2023-25, 2023-37 I.R.B. 821
2023-26, 2023-37 I.R.B. 822
2023-28, 2023-37 I.R.B. 823
2023-29, 2023-41 I.R.B. 1064
Notices:
2023-29, 2023-29 I.R.B. 1
2023-45, 2023-29 I.R.B. 317
2023-47, 2023-29 I.R.B. 318
2023-37, 2023-30 I.R.B. 359
2023-50, 2023-30 I.R.B. 361
2023-51, 2023-30 I.R.B. 362
2023-54, 2023-31 I.R.B. 382
2023-53, 2023-32 I.R.B. 424
2023-55, 2023-32 I.R.B. 427
2023-57, 2023-34 I.R.B. 560
2023-58, 2023-34 I.R.B. 563
2023-59, 2023-34 I.R.B. 564
2023-52, 2023-35 I.R.B. 650
2023-61, 2023-35 I.R.B. 651
2023-62, 2023-37 I.R.B. 817
2023-56, 2023-38 I.R.B. 824
2023-63, 2023-39 I.R.B. 919
2023-64, 2023-40 I.R.B. 974
2023-66, 2023-40 I.R.B. 992
2023-68, 2023-41 I.R.B. 1060
2023-65, 2023-42 I.R.B. 1067
2023-67, 2023-42 I.R.B. 1074
2023-69, 2023-42 I.R.B. 1079
Proposed Regulations:
REG-124123-22, 2023-30 I.R.B. 369
REG-124930-21, 2023-31 I.R.B. 431
REG-120730-21, 2023-33 I.R.B. 491
REG-134420-10, 2023-34 I.R.B. 571
REG-109348-22, 2023-35 I.R.B. 662
REG-120727-21, 2023-36 I.R.B. 670
REG-122793-19, 2023-38 I.R.B. 829
REG-100908-23, 2023-39 I.R.B. 931
REG-115559-23, 2023-42 I.R.B. 1082
REG-106203-23, 2023-43 I.R.B. 1143
REG-113064-23, 2023-43 I.R.B. 1144
Revenue Procedures:
2023-31, 2023-25 I.R.B. 386
2023-26, 2023-33 I.R.B. 486
2023-27, 2023-35 I.R.B. 655
2023-17, 2023-37 I.R.B. 819
2023-30, 2023-40 I.R.B. 995
2023-31, 2023-40 I.R.B. 1057
2023-32, 2023-41 I.R.B. 1064
2023-35, 2023-42 I.R.B. 1079
2023-28, 2023-43 I.R.B. 1092
2023-33, 2023-43 I.R.B. 1135
Revenue Rulings:
2023-13, 2023-32 I.R.B. 413
2023-14, 2023-33 I.R.B. 484
2023-15, 2023-34 I.R.B. 559
2023-15, 2023-34 I.R.B. 559
2023-16, 2023-37 I.R.B. 796
2023-17, 2023-37 I.R.B. 798
2023-18, 2023-40 I.R.B. 972
2023-19, 2023-41 I.R.B. 1059
Treasury Decisions:
9976, 2023-30 I.R.B. 354
9977, 2023-31 I.R.B. 375
9978, 2023-32 I.R.B. 415
9979, 2023-35 I.R.B. 602
9980, 2023-43 I.R.B. 1087
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2023–27 through 2023–52 is in Internal Revenue Bulletin
2023–52, dated December 27, 2023.

Bulletin No. 2023–43 iii October 23, 2023
Finding List of Current Actions on
Previously Published Items
1
Bulletin 2023–43
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2023–27 through 2023–52 is in Internal Revenue Bulletin
2023–52, dated December 27, 2023.

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