n-09-73.pdf

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# Part III - Administrative, Procedural, and Miscellaneous

## 2009 Section 43 Inflation Adjustment

Notice 2009-73

Section 43(b)(3)(B) of the Internal Revenue Code requires the Secretary to
publish an inflation adjustment factor. The enhanced oil recovery credit under § 43 for
any taxable year is reduced if the "reference price," determined under § 45K(d)(2)(C),
for the calendar year preceding the calendar year in which the taxable year begins is
greater than $28 multiplied by the inflation adjustment factor for that year. The credit is
phased out in any taxable year in which the reference price for the preceding calendar
year exceeds $28 (as adjusted) by at least $6.

The term "inflation adjustment factor" means, with respect to any calendar year,
a fraction the numerator of which is the GNP implicit price deflator for the preceding
calendar year and the denominator of which is the GNP implicit price deflator for 1990.

Because the reference price for the 2008 calendar year ($94.03) exceeds $28
multiplied by the inflation adjustment factor for the 2008 calendar year ($42.01) by
$52.02, the enhanced oil recovery credit for qualified costs paid or incurred in 2009 is
phased out completely.

Table 1 contains the GNP implicit price deflator used for the 2009 calendar year,
as well as the previously published GNP implicit price deflators used for the 1991
through 2008 calendar years.

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Notice 2009-73 TABLE 1 GNP IMPLICIT PRICE DEFLATORS

Calendar Year

GNP Implicit Price Deflator

1990

112.9 (used for 1991)

1991

117.0 (used for 1992)

1992

120.9 (used for 1993)

1993

124.1 (used for 1994)

1994

126.0 (used for 1995)*

1995

107.5

(used for 1996)

1996

109.7 (used for 1997) **

1997

112.35

(used for 1998)

1998

112.64

(used for 1999)

1999

104.59

(used for 2000)

2000

106.89

(used for 2001)

2001

109.31

(used for 2002)

2002

110.63

(used for 2003)

2003

105.67

(used for 2004)

2004

108.23 (used for 2005)

2005

112.129 (used for 2006)

2006

116.036 (used for 2007)

2007

119.656 (used for 2008)

2008

122.407 (used for 2009)

\* Beginning in 1995, the GNP implicit price deflator was rebased relative to 1992. The
1990 GNP implicit price deflator used to compute the 1996 § 43 inflation adjustment
factor is 93.6.

** Beginning in 1997, two digits follow the decimal point in the GNP implicit price
deflator. The 1990 GNP price deflator used to compute the 1998 § 43 inflation
adjustment factor is 93.63.

*** Beginning in 1999, the GNP implicit price deflator was rebased relative to 1996. The
1990 GNP implicit price deflator used to compute the 2000 § 43 inflation adjustment
factor is 86.53.

**** Beginning in 2003, the GNP implicit price deflator was rebased, and the 1990 GNP
implicit price deflator used to compute the 2004 § 43 inflation adjustment factor is
81.589.

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Table 2 contains the inflation adjustment factor and the phase-out amount for
taxable years beginning in the 2009 calendar year as well as the previously published
inflation adjustment factors and phase-out amounts for taxable years beginning in the
1991 through 2008 calendar years.

Notice 2009-73 TABLE 2

INFLATION ADJUSTMENT FACTORS AND PHASE-OUT AMOUNTS

Calendar

Inflation Adjustment

Phase-out

Year

Factor

Amount

1991

1.0000

0

1992

1.0363

0

1993

1.0708

0

1994

1.0992

0

1995

1.1160

0

1996

1.1485

0

1997

1.1720

0

1998

1.1999

0

1999

1.2030

0

2000

1.2087

0

2001

1.2353

0

2002

1.2633

0

2003

1.2785

0

2004

1.2952

0

2005

1.3266

0

2006

1.3743

100 percent

2007

1.4222

100 percent

2008

1.4666

100 percent

2009

1.5003

100 percent

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The principal author of this notice is Brian J. Americus of the Office of Associate
Chief Counsel (Passthroughs and Special Industries). For further information regarding
this notice, contact Mr. Americus at (202) 622-3110 (not a toll-free call).