a-03-46.pdf

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing.

This collection currently includes the publisher’s available advance-release directory. Historical bulletin renditions are discovered separately; an advance-release record alone does not certify the collection archive complete.

Part IV – Items of General Interest

Section 29 – Test Procedures and Significant Chemical Change

Announcement 2003-46

Section 29 of the Internal Revenue Code provides a tax credit for the
production and sale of solid synthetic fuels produced from coal. In Rev. Proc.
2001-30, 2001-1 C.B. 1163, the Internal Revenue Service provided that
taxpayers need to satisfy certain conditions in order to obtain a letter ruling
that a solid fuel (other than coke) produced from coal is a qualified fuel under
§ 29(c)(1)(C). Rev. Proc. 2001-30, as modified by Rev. Proc. 2001-34,
2001-1 C.B. 1293. Consistent with prior ruling practice, the revenue
procedure requires taxpayers to present evidence that all, or substantially all,
of the coal used as feedstock undergoes a significant chemical change. To
meet this requirement and obtain favorable letter rulings, taxpayers have
provided representations, as well as expert reports, asserting that their
processes resulted in a significant chemical change.
The Service has had reason to question the scientific validity of test
procedures and results that have been presented as evidence that fuel
underwent a significant chemical change, and is currently reviewing
information regarding these test procedures and results. If, upon further

- 2 -
inquiry, the Service determines that these test procedures and results do not
demonstrate that a significant chemical change has occurred, the Service will
take appropriate action, including revoking letter rulings relying on such
procedures and results.
Until the Service’s review is complete, rulings on the question of significant
chemical change will be suspended for requests relying on the procedures
and results being reviewed. Taxpayers may request a letter ruling pre-
submission conference to determine if a ruling request relies on test
procedures and results that are being reviewed. See
Section 11.07, Rev.
Proc. 2003-1, 2003-1 I.R.B. 1. During this review period, taxpayers that
previously received letter rulings and want certainty with respect to test
procedures and results used as evidence of a significant chemical change
may request a Pre-Filing Agreement by following the procedures set forth in
Rev. Proc. 2001-22, 2001-1 C.B. 745.
DRAFTING INFORMATION
The principal author of this announcement is Joseph Makurath of the
Office of Associate Chief Counsel (Passthroughs and Special Industries). For
further information regarding this announcement, contact Mr. Makurath at
202-622-3120 (not a toll free call).