rp-23-27.pdf

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Part III

Administrative, Procedural, and Miscellaneous

26 CFR 601.201: Rulings and determination letters.

Rev. Proc. 2023-27

SECTION 1. PURPOSE

This revenue procedure provides the process under § 48(e) of the Internal Revenue Code
(Code)
1
to apply for an allocation of environmental justice solar and wind capacity limitation
(Capacity Limitation). Receipt of an allocation increases the amount of an energy investment credit
determined under § 48(a) (§ 48 credit) for the taxable year in which certain solar and wind-powered
electricity generation facilitates are placed in service.
SECTION 2. BACKGROUND
.01 Section 13103 of Public Law 117–169, 136 Stat. 1818, 1921 (August 16, 2022), commonly
known as the Inflation Reduction Act of 2022 (IRA), added new § 48(e) to the Code. Section 48(e)
increases the amount of the § 48 credit with respect to eligible property that is part of a qualified
solar or wind facility that is awarded an allocation of Capacity Limitation as part of the low-income
communities bonus credit program for the energy investment credit (Program). The § 48 credit for a
taxable year is generally calculated by multiplying the basis of each energy property placed in

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

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service during that taxable year by the energy percentage (as defined in § 48(a)(2)). Section 48(e)
increases the § 48 credit by increasing the energy percentage used to calculate the amount of the §
48 credit (§ 48(e) Increase) in the case of qualified solar and wind facilities that receive an allocation
of Capacity Limitation.
.02 Section 48(e)(4) directs the Secretary to establish a program, within 180 days of enactment of
the IRA, to allocate amounts of Capacity Limitation to qualified solar and wind facilities. Notice
2023–17, 2023–10 I.R.B. 505, established the Low-Income Communities Bonus Credit Program and
provided definitions and other guidance related to the program. On June 1, 2023, the Department of
the Treasury (Treasury Department) and the Internal Revenue Service (IRS) published in the
Federal Register (88 FR 35791) a notice of proposed rulemaking (REG-110412-23, 2023-26 I.R.B.
1098) under § 48(e) (Proposed Regulations) relating to the Low-Income Communities Bonus Credit
Program. The Treasury Department and IRS adopted the Proposed Regulations with modifications
in Treasury Decision 9979 (Final Regulations).
.03 This revenue procedure provides the process for the Low-Income Communities Bonus Credit
Program. These procedural rules provide guidance necessary to implement the Low-Income
Communities Bonus Credit Program, including, in relevant part, information an applicant must
submit, the application review process, and the manner of obtaining an allocation from the IRS.
SECTION 3. CAPACITY LIMITATION RESERVATIONS AVAILABLE FOR ALLOCATION
The amount of Capacity Limitation available for allocation through the application process
provided in this Revenue Procedure is limited to the annual Capacity Limitation of 1.8 gigawatts of
direct current capacity for each of calendar years 2023 and 2024. As provided in § 1.48(e)-1(g), the
annual Capacity Limitation available for allocation is divided across the four facility categories
described in § 1.48(e)-1(b)(2). For 2023, the Treasury Department and the IRS plan to reserve the
total annual Capacity Limitation of 1.8 gigawatts of direct current capacity as shown in Table 1
below. As described in § 1.48(e)-1(g), the Treasury Department and the IRS may later re-allocate
these reservations across facility categories in the event any category is oversubscribed or has

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excess capacity. In addition, as described in the preamble to the Final Regulations, the Treasury
Department and the IRS may adjust this initial reservation of capacity in future guidance as needed
to achieve the goals of the Program and ensure an efficient allocation process.
Table 1
Category 1: Located in a Low-Income Community
Category 2: Located on Indian Land
Category 3: Qualified Low-Income Residential Building Project
Category 4: Qualified Low-Income Economic Benefit Project
700 megawatts
200 megawatts
200 megawatts
700 megawatts
SECTION 4. CATEGORY 1 SUB-RESERVATIONS
The 700 megawatts of Capacity Limitation reserved for Category 1 Facilities will be subdivided
for facilities seeking a Category 1 allocation with 490 megawatts of Capacity Limitation reserved
specifically for eligible residential behind the meter (BTM) facilities described in § 1.48(e)-1(i)(2)(ii),
including rooftop solar. The remaining 210 megawatts of Capacity Limitation reserved for Category
1 is available for applicants with front of the meter (FTM) facilities described in § 1.48(e)-1(i)(2)(iii) as
well as non-residential BTM facilities that meet the requirements of § 1.48(e)-1(i)(2)(i). As described
in § 1.48(e)-1(i)(1), the Treasury Department and the IRS may adjust this initial reservation of
capacity in future guidance based on factors such as promoting efficient allocation of Capacity
Limitation and allowing like-projects to compete for an allocation.
SECTION 5. APPLICATION
An applicant (defined in section 6 of this revenue procedure) must submit an application to apply
for an allocation of Capacity Limitation. The application must contain all information, documentation,
and attestations specified in section 7 of this revenue procedure and any additional information
required by the Department of Energy’s (DOE) publicly available written procedures. Applicants
must submit applications for a particular category of facility described in § 1.48(e)-1(b)(2) (that is,
Category 1 Facility, Category 2 Facility, Category 3 Facility, or Category 4 Facility). Applicants may
only submit one application per facility per the allocation year. DOE will publicly announce opening
and closing dates for the application.

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SECTION 6. APPLICANT
.01 In general. The owner of the solar or wind facility is the applicant who must apply for an
allocation of Capacity Limitation. The owner of the facility is the recipient of the allocation of
Capacity Limitation.
.02 D
isregarded entities. If a qualified solar or wind facility is owned by an entity that is
disregarded as separate from its owner for federal income tax purposes, the owner of the
disregarded entity is the owner of the facility and is the applicant.
.03 P
artnerships and S corporations. If a qualified solar or wind facility is owned by a partnership
or S corporation, then the partnership or S corporation is the owner of the facility and is the
applicant, not the partners or shareholders.
SECTION 7. APPLICATION PROCESS
.01 Registration.
(1) In general. Applications are collected through the portal hosted by the Department of
Energy (portal). Applicants must follow DOE’s publicly available procedures to register in the portal
and to submit applications.
(2) Application Submission. The applicant’s application and any required attestations must be
submitted under penalties of perjury and dated by the applicant. The person submitting the
application must have personal knowledge of the facts. Further, the application and any required
attestations must be submitted by a person authorized under state law to bind the applicant. For
example, an application may be authorized by an officer on behalf of a corporation, a general partner
of a state law partnership, a member-manager on behalf of a limited liability company, a trustee on
behalf of a trust, or the proprietor in the case of a sole proprietorship. If the applicant is a member of
an affiliated group filing consolidated returns, the submission also must be authorized by a duly
authorized officer of the common parent of the group.
.02 A
pplicant Information. The application must include the following identifying information:
(1) The name of the applicant;
(2) The unique federal taxpayer identification number for the applicant (if available);

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(3) The applicant’s address;
(4) If the applicant is a subsidiary corporation of a consolidated group, the legal name and
federal taxpayer identification number of the parent corporation of the consolidated group;
(5) The name and telephone number of the person submitting the application on behalf of the
applicant; and
(6) Any other information required by DOE’s publicly available written procedures.
.03 Facility Information.
(1) In general. The application must include the information described in sections 70.02(2) and
7.03(3) of this revenue procedure.
(
2) Facility maximum net output and nameplate capacity.
(a) Wind facility. Applicants seeking an allocation for a wind facility must report the expected
maximum net output of the facility defined as the nameplate capacity of the facility in alternating
current. Wind facilities selected for an allocation will be awarded an amount of Capacity Limitation in
direct current that is equal to the facility’s reported nameplate capacity in alternating current.
(b
) Solar facility. Applicants seeking an allocation for a solar facility must report the expected
maximum net output of the facility as measured in alternating current and the nameplate capacity of
the facility in direct current. Solar facilities selected for an allocation will be awarded an amount of
Capacity Limitation in direct current that is equal to the facility’s reported nameplate capacity in direct
current.
(
3) Facility location. Applicants are required to report the location of the facility, including street
address (if applicable) and coordinates (latitude and longitude).
.04 D
ocumentation.
(1) In general. Applicants must submit the documentation specified in sections 7.04(2) and
7.04(3) of this revenue procedure with an application for an allocation of Capacity Limitation. An
application is not complete and may be rejected if any required documentation is not included.
(
2) Facility documentation. The following documents are required for each facility
for which an application is submitted:

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Table 2

2
As defined in § 1.48(e)-1(i)(2)(iii), for the purposes of the Program, a qualified solar or wind facility is
front of the meter (FTM) if it is directly connected to a grid and its primary purpose is to provide electricity
to one or more offsite locations via such grid or utility meters with which it does not have an electrical
connection; alternatively, FTM is defined as a facility that is not BTM. For the purposes of Category 4, a
qualified solar or wind facility is also FTM if 50 percent or more of its electricity generation on an annual
basis is physically exported to the broader electricity grid.
3
As defined in § 1.48(e)-1(i)(2)(i), a qualified wind or solar facility is behind the meter (BTM) if (1) it is
connected with an electrical connection between the facility and the panelboard or sub-panelboard of the
site where the facility is located, (2) it is to be connected on the customer side of a utility service meter
before it connects to a distribution or transmission system (that is, before it connects to the electricity
grid), and its primary purpose is to provide electricity to the utility customer of the site where the facility is
located. This also includes systems not connected to a grid and that may not have a utility service meter,
and whose primary purpose is to serve the electricity demand of the owner of the site where the system is
located.
Document Requirement FTM
2
BTM
3
<= 1 MW AC BTM > 1 MW AC
An executed contract to purchase the
facility, an executed contract to lease the
facility, or an executed power purchase
agreement for the facility, in their entirety
inclusive of any amendments,
appendices, consumer disclosures, and
schedules thereto.
No Yes Yes
A copy of the final executed
interconnection agreement, if applicable
(see below).
If the facility is located in a market where
the interconnection agreement cannot be
signed prior to construction or
interconnection of the facility, a signed
conditional approval letter from the
jurisdictional utility and/or an affidavit
stating that an interconnection agreement
cannot be executed until after
construction of the facility signed by an
individual with authority to bind the
applicant.
If an interconnection agreement is not
applicable to the facility (for example, due
to utility ownership), this requirement is
satisfied by a final written decision from a
Public Utility Commission,
cooperative board, or other governing
body with sufficient authority that
financially authorizes the
facility.
Yes No Yes

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(3) Facility category specific document
. The application must include the following documents
for the applicable facility category:

Table 3
Document Requirement Category
1
Category 2 Category
3
Category 4
Documentation demonstrating property
will be installed on an eligible residential
building.

No No Yes No
Plans to ensure tenants receive required
financial benefits, including a draft
Benefits Sharing Statement.

No No Yes No
If applying under Additional Selection
Criteria: D ocumentation demonstrating
applicant meets Ownership Criteria
Documentation including, but not limited
to: IRS determination letter of tax-exempt
status; informational tax filings (Form
990); tax returns and employment tax
returns
4
; articles of incorporation or
certificate of formation and by-laws;
financial statements prepared by a third-
party and/or certified by an officer of the
entity; partnership agreement; and
employee records.

Yes Yes Yes Yes

.05 Attestations.
(1) In general. An application must include attestations specified in sections 7.05(2) and
7.05(3) of this revenue procedure. An application is not complete and may be rejected if any
required attestation is not included.
(
2) For all facilities. The following attestations are required for each facility for which an
application is submitted:

4
Redact Taxpayer Identification Numbers (TINs) before submitting tax returns and employment tax
returns.

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Table 4
Attestation Requirement FTM BTM <= 1 MW AC BTM > 1 MW AC
The applicant has site control through
ownership, an executed lease contract, site
access agreement or similar agreement
between the property owner and the applicant.
For a facility on Indian Lands under 25 U.S.
Code § 3501(2)(A)-(C), applicant has obtained
the applicable approval of the relevant tribal
government or Alaska Native Corporation
landowner.
Yes No No
The facility has obtained all applicable federal,
state, tribal, and local non-ministerial permits,
or that the facility is not required to obtain such
permits.
5

Yes Yes Yes
The applicant is in compliance with all federal,
state, and local laws, including consumer
protection provisions, and safety obligations,
and that the applicant did not and will not
engage in any unfair or deceptive acts or
practices.
Yes Yes Yes
The applicant has appropriately sized the
facility, or that customer/offtaker subscriptions
will be sized to meet the customer’s energy
needs, considering historical customer load
and/or reasonable future load projections, in
accordance with applicable state and local
requirements.
Yes Yes Yes
The proposed location of the facility has been
determined suitable for installation.
Yes Yes Yes

(3) Facility and category specific attestations
. The application must include the following
attestations for the applicable facility category:
Table 55

5
Non-ministerial permits are permits in which one or more officials or agencies consider various factors
and exercise some discretion in deciding whether to issue or deny permits. This does not include
ministerial permits based upon a determination that the request complies with established standards such
as electrical or building permits. Non-ministerial permits typically come with conditions and usually
require public notice or hearings. Examples of non-ministerial permits include local planning board
authorization, conditional use permits, variances, and special orders.

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Attestation Requirement Category
1
Category
2
Category
3
Category
4
Facility location is eligible.
6
Yes Yes No No
Consumer disclosures informing
customers of their legal rights and
protections have been provided to
customers prior to executing a contract
to subscribe or purchase power from the
facility, or lease a facility.
Yes Yes
Yes
(provided
to tenants
as
applicable)
Yes
The applicant will ensure at least 50% of
the financial benefits will be provided to
qualified households at 20% bill credit
discount rate.
No No No Yes
If applying under Additional Selection
Criteria: F acility location is eligible based
on PPC/CEJST.
7

Yes No Yes Yes

SECTION 8. REVIEW AND SELECTION PROCESS
.01 In general. DOE will review applications and provide a recommendation to the IRS regarding
whether to award an applicant an amount of Capacity Limitation with respect to a facility. Based on
DOE’s recommendation, the IRS will award the applicant a Capacity Limitation allocation or reject
the application.
.02 O
rder of application review.
(1) First 30 days. At the start of each program year, there will be a 30-day period during which
time applications will initially be accepted for each category. All applications submitted within the 30-
day period will be treated as submitted on the same date and at the same time.
(
2) Rolling application review. Following the 30-day period, DOE will generally accept
applications on a rolling basis and will review applications and provide recommendations to the IRS

6
For Category 1, the facility will be located in a low-income community as defined in the final rules for the
Program, specifically § 1.48(e)-1. A map that captures applicable census tracts will be available in DOE’s
publicly available written procedures to assist applicants. For Category 2, the facility will be located on
Indian Land as defined in § 2601(2) of the Energy Policy Act of 1992 (25 U.S.C. 3501(2)).
7
Maps that capture applicable census tracts will be available in DOE’s publicly available written
procedures to assist applicants.

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in the order applications are received until the IRS allocates all Capacity Limitation in a program
year. The IRS will award the applicants in the order that it receives recommendations from DOE.
(3) Lottery. If at the conclusion of the 30-day period described in section 8.02(1) of this revenue
procedure any category or Category 1 sub-reservation of Capacity Limitation is oversubscribed (as
provided in §1.48(e)-1(g)), applications in those oversubscribed categories or sub-reservation will be
entered into a lottery to determine the order of DOE’s review. DOE will first separate applications to
group all applications which purport to meet additional selection criteria described in §1.48(e)-1(h)(2)
(Ownership Criteria) and §1.48(e)-1(h)(3) (Geographic Criteria). These applications will be
prioritized and processed as described in section 8.03 of this revenue procedure.
(
4) Applications submitted after the 30-day period. Applications may still be submitted in
oversubscribed categories or for the Category 1 sub-reservation of Capacity Limitation after the 30-
day period and until the close of a program year. Those applications may be reviewed in the order
received only after DOE’s review and the IRS’s award determinations regarding all applications
submitted within the first 30 days. Applications submitted will only be reviewed if there is remaining
Capacity Limitation.
(
5) Close of program year. After the IRS awards all the Capacity Limitation within each
category, or the program year is closed, DOE will cease review of any remaining applications. After
the end of the program year, no further action will be taken on applications submitted but not
awarded an allocation. Applicants may reapply in the next program year if they remain eligible.
.03 P
rocessing Additional Selection Criteria applications.
(1) In general. Fifty percent of the Capacity Limitation in each facility category will be reserved
for qualified solar or wind facilities meeting the Ownership Criteria described in §1.48(e)-1(h)(2) and
the Geographic Criteria described in §1.48(e)-1(h)(3) (Additional Selection Criteria). As described in
§ 1.48(e)-1(h)(1), the Treasury Department and the IRS may adjust this initial reservation of capacity
in future guidance.
(
2) Review of Additional Selection Criteria applications. Applications purporting to meet an
Additional Selection Criteria are generally evaluated on the same schedule as other applications

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unless a facility category is oversubscribed at the close of the initial 30-day application period
described in section 8.02(2) of this revenue procedure in which case such applications are
considered first and other applications are entered into a lottery to determine the order of review
(see section 8.02(3) of this revenue procedure). If the eligible applications for Capacity Limitation for
facilities that meet at least one of the two Additional Selection Criteria exceed the Capacity Limitation
for a category, facilities purporting to meet both of the Additional Selection Criteria are reviewed
before other applications within each facility category described in § 48(e)(2)(A)(iii) and §1.48(e)-
1(b)(2). Allocations for facilities meeting one or more of the Additional Selection Criteria will be
made from the 50-percent reserve for such facilities before additional amounts reserved for a facility
category are allocated. A lottery will be used to determine the order of review of applications
purporting to meet Additional Selection Criteria if such applications exceed the Capacity Limitation
reserved for the facility category.
.04 Cure period for application defects.
(1) In general. If the assigned DOE reviewer identifies a defect with a submitted application,
such as missing or incorrect information or documentation, the DOE will contact the applicant via the
portal. The reviewer will request that the applicant submit additional information or documentation to
correct or complete the application via the portal.
(
2) Timing for applicant response. An applicant that is contacted by a DOE reviewer to submit
additional information or documentation or provide corrected information will have 21 business days
to respond and provide such requested information or documentation.
(
3) Consequences for failure to respond or provide information. If an applicant fails to respond
and/or provide the requested information or documentation within the 21-day cure period, DOE will
cease review and mark the application as withdrawn. If withdrawn, the applicant may create and
submit a new application for review at a later date if the facility remains eligible.
SECTION 9. NOTIFICATION OF ALLOCATION DECISION FROM IRS
.01 In general. The IRS will send final decision letters through the portal to inform applicants of
the outcome of the application process. For any applicant that receives an award of Capacity

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Limitation, the letter will state the amount of the allocated Capacity Limitation.
.02 Allocation amount. The Capacity Limitation allocated to a facility will be determined based
on the nameplate capacity of the facility as stated in the application. The Capacity Limitation
allocation will be provided in direct current. For wind facilities, alternating current will be treated as
equivalent to direct current for purposes of determining the amount of a Capacity Limitation
allocation. The facility that receives the final allocation of Capacity Limitation in each facility
category or Category 1 sub-reservation may receive an allocation less than its nameplate capacity.
SECTION 10. PLACED IN SERVICE
.01 In general. To satisfy the requirements of §1.48-1(k), for any facility that received an
allocation of Capacity Limitation, the owner of the facility must report to the DOE the date the facility
was placed in service.
.02 D
ocumentation and attestation requirements. To satisfy the requirements of §1.48-1(k), the
owner must provide the following:
(1) An attestation confirming that there has been no material ownership and/or facility changes
from the application;
(2) Permission to Operate (PTO) letter (or commissioning report verifying for off-grid facilities)
confirming that the facility has been placed in service and the location of the facility being placed in
service;
(3) Final, Professional Engineer (PE) stamped (if required by applicable state or local law) as-
built design plan, PTO letter with nameplate capacity listed, or other documentation from an
unrelated party verifying as-built nameplate capacity;
(4) For Category 3 Facilities, a Benefits Sharing Statement as defined in §1.48(e)-1(e)(4);
(5) For Category 4 Facilities, a final list of low-income households served with name, address,
subscription share, and the income verification method used; and
(6) For Category 4 Facilities, a spreadsheet demonstrating the expected financial benefit to low-
income subscribers to demonstrate the 20 percent bill credit discount rate.
SECTION 11. EFFECT OF ALLOCATION OR OTHER NOTIFICATION

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A Capacity Limitation allocation or a notification that a facility has met the eligibility requirements
under the Low-Income Communities Bonus Credit Program at the time the facility is placed in
service is not a final determination that property is eligible for an increased credit under § 48(e). The
IRS may, upon examination, determine that property does not qualify for the increased credit.
SECTION 12. CLAIMING THE ENERGY PERCENTAGE INCREASE
.01 In general. After the facility is placed in service, and the applicant submits the additional
documentation and attestations described in §1.48-1(k), the applicant is notified that it (or the
applicable partners or shareholders in the case of a partnership or an S corporation) may claim the
energy percentage increase on Form 3468, Investment Credit (or successor form) or Form 3800,
General Business Credit (or successor form), if eligible, make a transfer election under § 6418, or, if
eligible, make an elective payment election under § 6417.
.02 R
eduction in Increased Energy Percentage. In cases where the facility size is larger than the
allocated capacity when placed in service (but still below 5 MW AC), the 10 percentage or 20
percentage point increase will be reduced by a reduction factor which is calculated by the amount of
Capacity Limitation allocated (kW) divided by the total nameplate capacity installed (kW) at the time
the owner of the facility claims the energy percentage increase under § 48(e). See § 48(e)(2)(B).
SECTION 13. SUCCESSOR IN INTEREST
.01 In general. Except as otherwise provided in this section 13, a Capacity Limitation allocation
award applies only to the taxpayer who applied for and received an allocation award for the facility
the taxpayer owns. If a taxpayer wants to request a transfer of an allocation, it should refer to DOE’s
publicly available written procedures to initiate a transfer request with the IRS.
.02 A
dditional Selection Criteria. Applicants who received an allocation based on the Additional
Selection Criteria should refer to §1.48(e)-1(m)(v) regarding potential disqualification if the original
applicant does not retain an ownership interest in an entity that owns the facility or the successor
does not provide the required attestation.
SECTION 14. APPLICABILITY DATE
This revenue procedure applies to taxable years ending on or after the date of publication of the

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Final Regulations.
SECTION 15. PAPERWORK REDUCTION ACT
This revenue procedure is not creating a new collection of information as described by the
Paperwork Reduction Act (44 U.S.C. 3507(d)). The collections of information contained within this
revenue procedure, and their associated burdens, have been submitted to the Office of Management
and Budget as part of TD 9979 and will be approved under OMB Control Number 1545-2308.
SECTION 16. DRAFTING INFORMATION
The principal author of this revenue procedure is the Office of Associate Chief Counsel
(Passthroughs & Special Industries). However, other personnel from the Treasury Department and
the IRS participated in its development. For further information regarding this revenue procedure,
call the energy security guidance contact number at (202) 317-5254 (not a toll-free call).