Internal Revenue Bulletin 2024-22 (PDF rendition): IRS Revenue Rulings

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Bulletin No. 2024–22
May 28, 2024
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
Rev. Proc. 2024-25, page 1333.
This revenue procedure provides the 2025 inflation adjusted
amounts for Health Savings Accounts (HSAs) as determined
under § 223 of the Internal Revenue Code and the maximum
amount that may be made newly available for excepted ben-
efit health reimbursement arrangements (HRAs) provided
under § 54.9831-1(c)(3)(viii) of the Pension Excise Tax Reg-
ulations.
ADMINISTRATIVE, INCOME TAX
T.D. 9995, page 1241.
These final regulations provide guidance regarding general
provisions and special rules for §§ 25E and 30D, as well as
rules related to the Critical Minerals and Battery Components
Requirements of section 30D(e). Furthermore, these final
regulations provide guidance for elections to transfer clean
vehicle credits under §§ 25E(f) and 30D(g). These final reg-
ulations provide guidance to qualified manufacturers of new
clean vehicles to comply with rules regarding foreign entities
of concern (FEOC) and excluded entities. These final regu-
lations provide guidance for qualified manufacturers of new
clean vehicles to comply with rules to determine if the bat-
tery components and applicable critical minerals contained in
a vehicle battery satisfy the requirements of § 30D(d)(7) and
are FEOC-compliant. Finally, the final regulations also define
the omission of a correct vehicle identification number for
purposes of § 6213.
ESTATE TAX, GIFT TAX
T.D. 9996, page 1317.
These final regulations provide guidance under section
2642(g) describing the circumstances and procedures under
which an extension of time will be granted by the Internal
Revenue Service (IRS) to make certain allocations and elec-
tions related to the generation-skipping transfer (GST) tax.
Since the enactment of section 2642(g) in 2001, the IRS
has granted relief for such allocations and elections under
the regulatory authority of section 301.9100-1 through the
private letter ruling program. In order to reduce taxpayers’
compliance burden attendant to requesting relief under sec-
tion 301.9100-1, the final regulations set forth nonexclusive
factors that the IRS will consider in determining whether a
transferor, or the executor of a transferor’s estate, has met
the standards of reasonableness, good faith, and lack of prej-
udice to the interests of the Government so that the IRS may
grant relief. Henceforward, taxpayers requesting relief for
certain allocations and elections related to the GST tax must
seek relief under section 2642(g) and cannot obtain relief
under section 301.9100-1.
EXEMPT ORGANIZATIONS
Rev. Proc. 2024-22, page 1332.
This revenue procedure obsoletes Rev. Proc. 82-2, 1982-1
C.B. 367, which identified the circumstances in which an
organization could satisfy § 1.501(c)(3)-1(b)(4) (requiring that
the assets of a section 501(c)(3) organization be dedicated
to an exempt purpose) by operation of the law of certain
States or the District of Columbia. Due to material changes
in the law of many jurisdictions since 1982, the jurisdictional
list set forth in Rev. Proc. 82-2 is no longer accurate.
Rev. Rul. 2024-10, page 1240.
This revenue ruling obsoletes Rev. Rul. 75-38, 1975-1 C.B.
161, which identified the District of Columbia and each State
with statutory provisions that, in 1975, satisfied the private
foundation governing instrument requirements of section
508(e). Due to material changes in the laws of a number
of jurisdictions since 1975, the jurisdictional list set forth in
Rev. Rul. 75-38 is no longer accurate.
Finding Lists begin on page ii.

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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
Rulings. Bank Secrecy Act Administrative Rulings are issued
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.
May 28, 2024 Bulletin No. 2024–22

Part I
Section 508.—Special
Rules with Respect
to Section 501(c)(3)
Organizations
26 CFR 1.508-3: Governing instruments.
Rev. Rul. 2024-10
This revenue ruling obsoletes Rev. Rul.
75-38, 1975-1 C.B. 161, which identified
the State laws and circumstances that the
Internal Revenue Service (IRS) previously
concluded would permit an organization
to satisfy the private foundation govern-
ing instrument requirements of § 508(e)
of the Internal Revenue Code (Code).
1
A
number of the State laws identified in Rev.
Rul. 75-38 have materially changed, and
a revenue ruling cannot be relied upon to
the extent it is predicated on State law and
that State law has materially changed. See
Rev. Proc. 89-14, 1989-1 C.B. 814.
LAW AND ANALYSIS
Section 508(e) provides that a private
foundation will not be exempt from Fed-
eral income taxation under § 501(a) unless
its governing instrument includes provi-
sions the effects of which are to require
its income for each taxable year to be dis-
tributed at such time and in such manner
as not to subject the private foundation to
tax under § 4942 and to prohibit the pri-
vate foundation from engaging in any act
of self-dealing (as defined in § 4941(d)),
from retaining any excess business hold-
ings (as defined in § 4943(c)), from mak-
ing any investments in such manner as to
subject the private foundation to tax under
§ 4944, and from making any taxable
expenditures (as defined in § 4945(d)).
Section 1.508-3(a) provides a general rule
that is consistent with § 508(e).
Section 1.508-3(d)(1) provides, how-
ever, that a private foundation’s governing
instrument will be deemed to satisfy the
requirements of § 1.508-3(a) if valid pro-
visions of State law have been enacted that:
(1) Require it to act or refrain from act-
ing so as not to subject the private foun-
dation to the taxes imposed by §§ 4941,
4942, 4943, 4944, and 4945; or
(2) Treat the required provisions as
contained in the private foundation’s gov-
erning instrument.
Rev. Rul. 75-38 identified 48 States
and the District of Columbia as jurisdic-
tions with statutory provisions in effect
at the time of its publication that satisfied
the requirements of § 508(e). Rev. Rul.
75-38 also noted exceptions included in
those statutory provisions, such as cases
in which a court determines that the pro-
visions do not apply to a particular private
foundation or in which a private founda-
tion expressly opts out of the statutory
provisions through a provision in its gov-
erning instrument.
Section 7.01(5) of Rev. Proc. 89-14
cautions taxpayers, IRS personnel, and
others concerned to determine whether a
revenue ruling on which they seek to rely
has been revoked, modified, declared
obsolete, distinguished, clarified, or
otherwise affected by subsequent leg-
islation, treaties, regulations, revenue
rulings, revenue procedures, or court
decisions. Section 7.01(6) of Rev. Proc.
89-14 provides that if the conclusion
of a revenue ruling is predicated upon
a certain provision or interpretation of
law other than Federal tax law, taxpay-
ers, IRS personnel, and others generally
must determine whether such relevant
non-Federal tax law has changed materi-
ally from that used in the revenue ruling
on which they seek to rely. Therefore,
under section 7.01(5) and (6) of Rev.
Proc. 89-14, a revenue ruling cannot
be relied upon to the extent it is predi-
cated on State law and that State law has
materially changed.
A number of the statutory provisions
considered in Rev. Rul. 75-38 have since
been amended, repealed, or replaced. Rev.
Rul. 75-38 therefore no longer provides an
accurate list of the jurisdictions with stat-
utory provisions that satisfy the require-
ments of § 508(e) or of the exceptions to
those statutory provisions.
In addition, Rev. Rul. 75-38 does not
address potential differences in the State
statutory provisions that apply depending
on whether an organization is formed as
a charitable trust or as a not-for-profit (or
nonstock) corporation. While most States
have enacted statutory provisions having
the effects described in § 508(e) for both
charitable trusts and not-for-profit corpo-
rations, there are a small number of States
with statutory provisions that satisfy the
requirements of § 508(e) for charitable
trusts or not-for-profit corporations but
not both.
For the foregoing reasons, this revenue
ruling is being published to obsolete Rev.
Rul. 75-38.
A private foundation is responsible
for verifying whether the requirements
of § 508(e) are satisfied by applicable
State law if its governing instrument
does not include the provisions described
in § 508(e). A private foundation can
ensure that it satisfies the requirements
of § 508(e) by including the provisions
described in § 508(e) in its governing
instrument. Publication 557, Tax-Exempt
Status for Your Organization (currently
available at: https://www.irs.gov/pub/irs-
pdf/p557.pdf), provides samples of gov-
erning instrument provisions that a private
foundation may include in its governing
instrument to satisfy the requirements of
§ 508(e).
EFFECT ON OTHER REVENUE
RULINGS
Rev. Rul. 75-38, 1975-1 C.B. 161, is
obsoleted as of May 24, 2024.
DRAFTING INFORMATION
The principal author of this revenue
ruling is Christopher Hyde of the Office
of Associate Chief Counsel (Employee
Benefits, Exempt Organizations, and
Employment Taxes). For further informa-
tion regarding this revenue ruling, contact
Mr. Hyde at (202) 317-5800 (not a toll-
free number).
1
Unless otherwise specified, all “section” or “§” references are to sections of the Code or the Income Tax Regulations (26 CFR part 1).
May 28, 2024 1240 Bulletin No. 2024–22

26 CFR 1.25E-1, 1.25E-2, 1.25E-3, 1.30D-1, 1.30D-
2, 1.30D-3, 1.30D-4, 1.30D-5, 1.30D-6, 301.6213-2
T.D. 9995
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Parts 1 and 301
Clean Vehicle Credits under
Sections 25E and 30D;
Transfer of Credits; Critical
Minerals and Battery
Components; Foreign
Entities of Concern
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations.
SUMMARY: This document contains
final regulations regarding Federal income
tax credits under the Inflation Reduction
Act of 2022 (IRA) for the purchase of
qualifying new and previously-owned
clean vehicles, including new and pre-
viously-owned plug-in electric vehicles
powered by an electric battery meeting
certain requirements and new qualified
fuel cell motor vehicles. In addition, the
final regulations provide guidance for tax-
payers who purchase qualifying vehicles
and intend to transfer the amount of any
previously-owned clean vehicle credit or
new clean vehicle credit to dealers that
are entities eligible to receive advance
payments of either credit. The final reg-
ulations also provide guidance for deal-
ers to become eligible entities to receive
advance payments of previously-owned
clean vehicle credits or new clean vehicle
credits, and rules regarding recapture of
the credits. Finally, the final regulations
provide guidance on the meaning of three
new definitions added to the exclusive list
of mathematical or clerical errors relating
to certain assessments of tax without a
notice of deficiency.
DATES: Effective date: These regulations
are effective on July 5, 2024.
Applicability dates: For dates of applica-
bility, see §§1.25E-1(h), 1.25E-2(i), 1.25E-
3(k), 1.30D-1(d), 1.30D-2(d), 1.30D-
3(h), 1.30D-4(j), 1.30D-5(k), 1.30D-6(j),
and 301.6213-2(c).
FOR FURTHER INFORMATION
CONTACT: Rika Valdman or Maggie
Stehn of the Office of Associate Chief
Counsel (Passthroughs & Special Indus-
tries) at (202) 317-6853 (not a toll-free
number).
SUPPLEMENTARY INFORMATION:
Background
This document contains amendments
to the Income Tax Regulations (26 CFR
part 1) under sections 25E and 30D of
the Internal Revenue Code (Code), and
to the Procedure and Administration Reg-
ulations (26 CFR part 301) under section
6213 of the Code.
I. Section 25E
Section 13402 of Public Law 117-169,
136 Stat. 1818 (August 16, 2022), com-
monly known as the IRA, added section
25E to the Code. The credit under section
25E (section 25E credit) is a personal
credit allowable under subpart A of the
Code.
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.
Section 25E(b)(1) sets a limita-
tion based on modified adjusted gross
income (Modified AGI) and provides
that no credit is allowed for any taxable
year if (A) the lesser of (i) the Modi-
fied AGI of the taxpayer for such tax-
able year, or (ii) the Modified AGI 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) of the Code), 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 tax-
payer, the threshold amount is $75,000.
Section 25E(b)(3) defines Modified
AGI as adjusted gross income (AGI)
increased by any amount excluded from
gross income under section 911, 931, or
933 of the Code.
Section 25E(c) defines certain terms for
purposes of the section 25E credit. Sec-
tion 25E(c)(1) defines “previously-owned
clean vehicle” as a motor vehicle:
(A) the model year of which is at least
2 years earlier than the calendar year in
which the taxpayer acquires such vehicle;
(B) the original use of which com-
mences with a person other than the tax-
payer;
(C) that is acquired by the taxpayer in a
qualified sale; and
(D) that (i) meets the requirements of
section 30D(d)(1)(C), (D), (E), (F), and
(H) (except for section 30D(d)(1)(H)(iv)),
or (ii) is a motor vehicle that (I) satisfies
the requirements under section 30B(b)(3)
(A) and (B), and (II) has a gross vehicle
weight rating (GVWR) of less than 14,000
pounds.
Section 25E(c)(2) defines a “qualified
sale” as a sale of a motor vehicle (A) by
a dealer (as defined in section 30D(g)(8));
(B) for a sale price that does not exceed
$25,000; and (C) that is the first transfer
since the date of enactment of the IRA to a
qualified buyer other than the person with
whom the original use of such vehicle
commenced.
Under section 25E(c)(3), “qualified
buyer” means, with respect to a sale of a
motor vehicle, a taxpayer (A) who is an
individual; (B) who purchases such vehi-
cle for use and not for resale; (C) with
respect to whom no deduction is allowable
with respect to another taxpayer under
section 151 of the Code; and (D) 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.
Section 25E(c)(4) defines “motor vehi-
cle” and “capacity” to have the meaning
given such terms in section 30D(d)(2) and
(4), respectively.
Section 25E(d) provides that no credit
is allowed under section 25E(a) with
respect to any vehicle unless the taxpayer
Bulletin No. 2024–22 1241 May 28, 2024

May 28, 2024 1242 Bulletin No. 2024–22
includes the vehicle identification number
(VIN) of such vehicle on the return of tax
for the taxable year.
Section 25E(e) and (f) provide, respec-
tively, that rules similar to the rules of
section 30D(f) (without regard to para-
graph (10) or (11) thereof) and the rules of
section 30D(g) apply for purposes of sec-
tion 25E. 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.
Section 25E(g) provides that no section
25E credit is allowed with respect to a
vehicle acquired after December 31, 2032.
II. Section 30D
A. In general
Section 30D(a) provides a credit (sec-
tion 30D credit) with respect to each new
clean vehicle that a taxpayer purchases
and places in service. The credit is deter-
mined and allowable with respect to the
taxable year in which the taxpayer places
the new clean vehicle in service.
Section 30D was originally enacted by
section 205(a) of the Energy Improvement
and Extension Act of 2008, Division B of
Pub. L. No. 110-343, 122 Stat. 3765, 3835
(October 3, 2008), to provide a credit for
the purchase and placing in service of
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.
The amount of the section 30D credit
is treated as a personal credit or a general
business credit, depending on the character
of the vehicle. In general, the section 30D
credit is treated as a personal credit allow-
able under subpart A of the Code. Section
30D(c)(2). However, the amount of the
section 30D credit that is attributable to
property that is of a character subject to an
allowance for depreciation is treated as a
current year business credit under section
38(b) instead of being allowed under sec-
tion 30D(a). 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).
B. IRA amendments to Section 30D
1. Credit Amount and Critical Minerals
and Battery Components Requirements
The IRA amends the rules for deter-
mining the amount of the section 30D
credit. Prior to the amendments to section
30D made by section 13401(a) and (e) of
the IRA, the amount of the section 30D
credit was calculated based on the vehi-
cle’s battery capacity. The base amount
was $2,500, plus $417 for a battery with
a capacity of at least 5 kilowatt hours,
and an additional $417 for each kilowatt
hour of capacity in excess of 5 kilowatt
hours, up to a maximum credit of $7,500
per vehicle. Section 13401(a) of the IRA
amends section 30D(b) to provide a max-
imum credit of $7,500 per vehicle, con-
sisting of $3,750 in the case of a vehicle
that meets certain requirements relating
to critical minerals and $3,750 in the case
of a vehicle that meets certain require-
ments relating to battery components. The
amendments made by section 13401(a) of
the IRA apply to vehicles placed in service
after the date on which the Secretary of the
Treasury or her delegate (Secretary) issues
proposed guidance described in new sec-
tion 30D(e)(3)(B) of the Code relating
to the new critical minerals requirements
described in new section 30D(e)(1)(A)
(Critical Minerals Requirement) and the
new battery components requirements
described in new section 30D(e)(2)(A)
(Battery Components Requirement). See
section 13401(k)(3) of the IRA.
New section 30D(e)(1)(A) provides
that the Critical Minerals Requirement
with respect to the battery from which
the electric motor of a vehicle draws elec-
tricity is satisfied if the percentage of the
value of the applicable critical minerals
(as defined in section 45X(c)(6) of the
Code) contained in such battery that were
(i) extracted or processed in the United
States, or in any country with which the
United States has a free trade agreement in
effect, or (ii) recycled in North America,
is equal to or greater than the applicable
percentage (as certified by the qualified
manufacturer, in such form or manner as
prescribed by the Secretary). The appli-
cable percentage for the Critical Minerals
Requirement is set forth in section 30D(e)
(1)(B)(i) through (v), and varies based
on when the vehicle is placed in service.
In the case of a vehicle placed in service
after the date of issuance of the proposed
guidance described in new section 30D(e)
(3)(B) and before January 1, 2024, the
applicable percentage is 40 percent. In the
case of a vehicle placed in service during
calendar year 2024, 2025, and 2026, the
applicable percentage is 50 percent, 60
percent, and 70 percent, respectively. In
the case of a vehicle placed in service
after December 31, 2026, the applicable
percentage is 80 percent.
New section 30D(e)(2)(A) provides
that the Battery Components Requirement
with respect to the battery from which the
electric motor of a vehicle draws elec-
tricity is satisfied if the percentage of the
value of the components contained in
such battery that were manufactured or
assembled in North America is equal to
or greater than the applicable percentage
(as certified by the qualified manufacturer,
in such form or manner as prescribed by
the Secretary). The applicable percent-
age for the Battery Components Require-
ment is set forth in section 30D(e)(2)(B)
(i) through (vi) and varies based on when
the vehicle is placed in service. In the case
of a vehicle placed in service after the
date of issuance of the proposed guidance
described in new section 30D(e)(3)(B) of
the Code and before January 1, 2024, the
applicable percentage is 50 percent. In the
case of a vehicle placed in service during
calendar year 2024 or 2025, the applicable
percentage is 60 percent. In the case of a
vehicle placed in service during calendar
year 2026, 2027, and 2028, the applicable
percentage is 70 percent, 80 percent, and
90 percent, respectively. In the case of a
vehicle placed in service after December
31, 2028, the applicable percentage is 100
percent.
2. New Clean Vehicle Definition
Section 13401(c) of the IRA amends
section 30D(d) of the Code by making the
credit applicable to “new clean vehicles,”
instead of “new qualified plug-in electric
drive motor vehicles.” This amendment
is applicable to vehicles placed in service
after December 31, 2022. As amended by
section 13401(c) and (g)(2) of the IRA,
section 30D(d)(1) of the Code defines a
“new clean vehicle” as a motor vehicle

Bulletin No. 2024–22 1243 May 28, 2024
that satisfies the eight requirements set
forth in section 30D(d)(1)(A) through (H)
of the Code: the original use of the motor
vehicle must commence with the taxpayer;
the motor vehicle must be acquired for use
or lease by the taxpayer and not for resale;
the motor vehicle must be made by a
qualified manufacturer; the motor vehicle
must be treated as a motor vehicle for pur-
poses of title II of the Clean Air Act; the
motor vehicle must have a gross vehicle
weight rating of less than 14,000 pounds;
the motor vehicle must be propelled to a
significant extent by an electric motor that
draws electricity from a battery that has a
capacity of not less than 7 kilowatt hours,
and is capable of being recharged from
an external source of electricity; the final
assembly of the motor vehicle must occur
within North America; and the person
who sells any vehicle to the taxpayer must
furnish a report to the taxpayer and to the
Secretary, at such time and in such manner
as the Secretary provides, containing spe-
cifically enumerated items.
With respect to the requirement that the
motor vehicle must be made by a quali-
fied manufacturer, the IRA creates new
requirements for manufacturers of vehi-
cles eligible for the section 30D credit that
are applicable to vehicles placed in service
after December 31, 2022. As amended
by section 13401(c) of the IRA, section
30D(d)(3) of the Code defines a “quali-
fied manufacturer” as any manufacturer
(within the meaning of the regulations
prescribed by the Administrator of the
Environmental Protection Agency (EPA)
for purposes of the administration of title
II of the Clean Air Act (42 U.S.C. 7521
et seq.)) that enters into a written agree-
ment with the Secretary under which such
manufacturer agrees to make periodic
written reports to the Secretary (at such
times and in such manner as the Secretary
may provide) providing vehicle identifica-
tion numbers and such other information
related to each vehicle manufactured by
such manufacturer as the Secretary may
require.
The IRA requires new clean vehicles to
undergo final assembly in North America
to be eligible for the section 30D credit.
This requirement is applicable to vehi-
cles sold after August 16, 2022. See sec-
tion 13401(k)(2) of the IRA. New section
30D(d)(5) defines “final assembly” as the
process by which a manufacturer produces
a new clean vehicle at, or through the use
of, a plant, factory, or other place from
which the vehicle is delivered to a dealer
or importer with all component parts nec-
essary for the mechanical operation of the
vehicle included with the vehicle, whether
or not the component parts are perma-
nently installed in or on the vehicle.
The IRA provides that certain fuel cell
vehicles may qualify for the section 30D
credit. Section 13401(c) of the IRA adds
new section 30D(d)(6) to the Code, which
includes in the definition of the term
“new clean vehicle” applicable to vehi-
cles placed in service after December 31,
2022, any “new qualified fuel cell motor
vehicle” (as defined in section 30B(b)(3))
that meets the requirements under sec-
tion 30D(d)(1)(G) and (H) (North Amer-
ican final assembly and seller reporting
requirements).
The IRA disqualifies certain vehicles
from the section 30D credit if the battery
of the vehicle contains critical minerals or
battery components from a foreign entity
of concern (FEOC). As amended by sec-
tion 13401(e) of the IRA, section 30D(d)
(7) of the Code excludes, after certain spec-
ified dates, vehicles placed in service with
batteries containing certain critical miner-
als or battery components from a FEOC
from the definition of the term “new clean
vehicle.” In particular, amended section
30D(d)(7) (FEOC Restriction) provides
that the term “new clean vehicle” does not
include (A) any vehicle placed in service
after December 31, 2024, with respect to
which any of the applicable critical miner-
als contained in the battery of such vehi-
cle (as described in section 30D(e)(1)(A))
were extracted, processed, or recycled by
a FEOC (as defined in section 40207(a)(5)
of the Infrastructure Investment and Jobs
Act (42 U.S.C. 18741(a)(5))), or (B) any
vehicle placed in service after December
31, 2023, with respect to which any of
the components contained in the battery
of such vehicle (as described in section
30D(e)(2)(A)) were manufactured or
assembled by a FEOC (as so defined).
3. Elimination of Phaseout
The IRA eliminates the phaseout of
the section 30D credit for vehicles made
by manufacturers that have sold at least
200,000 vehicles eligible for the credit for
use in the United States after December
31, 2009. Pursuant to section 13401(d)
of the IRA this limitation does not apply
to vehicles sold after December 31, 2022.
See section 13401(k)(5) of the IRA.
4. Special Rules
The IRA adds four new special rules
under section 30D(f) applicable to vehi-
cles placed in service after December 31,
2022. First, section 30D(f)(8) permits
only one section 30D credit to be claimed
for each VIN. Second, section 30D(f)(9)
requires taxpayers to include on the tax-
payer’s return for the taxable year the VIN
of the vehicle for which the section 30D
credit is claimed.
Third, section 30D(f)(10) denies the
section 30D credit to certain high-income
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 AGI of the taxpayer
for such taxable year, or (II) the Modi-
fied AGI of the taxpayer for the preced-
ing taxable year, exceeds (ii) the thresh-
old amount. 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 sec-
tion 30D(f)(10)(C) defines Modified AGI
as AGI increased by any amount excluded
from gross income under sections 911,
931, or 933.
Fourth, section 30D(f)(11) excludes
from the section 30D credit vehicles that
exceed certain manufacturer’s suggested
retail price (MSRP) thresholds. New sec-
tion 30D(f)(11)(A) provides that no credit
is allowed for a vehicle if the MSRP of the
vehicle exceeds the applicable limitation.
New section 30D(f)(11)(B) provides that
the applicable limitation for each vehicle
classification is as follows: in the case of a
van, $80,000; in the case of a sport utility
vehicle, $80,000; in the case of a pickup
truck, $80,000; and in the case of any other
vehicle, $55,000. New section 30D(f)(11)
(C) authorizes the Secretary to prescribe
such regulations or other guidance as the
Secretary determines necessary to deter-

May 28, 2024 1244 Bulletin No. 2024–22
mine vehicle classifications using criteria
similar to that employed by the EPA and
the Department of the Energy (DOE) to
determine size and class of vehicles.
5. Transfer of Credit
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 sub-
ject to such regulations or other guidance
as the Secretary determines necessary, a
taxpayer may elect to transfer a section
30D credit with respect to a new clean
vehicle to an eligible entity (credit transfer
election).
1
If the taxpayer who acquires a
new clean vehicle makes a credit transfer
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 “eligi-
ble 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 credit 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 condi-
tion of the credit 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 credit transfer election,
and such election does not limit the value
or use of such incentive.
Section 30D(g)(3) addresses the timing
of the transfer and provides that any credit
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 credit 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 tax-
payer who acquired the vehicle in the same
manner as if the section 30D credit deter-
mined 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 eligible entity provides
the VIN of such vehicle 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
credit 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 Common-
wealth of Puerto Rico, any other territory
or possession 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 rec-
ognized 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
credit 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 Modi-
fied AGI limitation of section 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.
Section 13401(k)(4) of the IRA pro-
vides that the ability for a taxpayer to elect
to transfer a section 30D credit under sec-
tion 30D(g) applies to vehicles placed in
service after December 31, 2023.
1
As discussed in section VIII of this Background section, on October 10, 2023, the Treasury Department and the IRS published a notice of proposed rulemaking (REG-113064-23) in the
Federal Register (88 FR 70310), that referred to this election as the “vehicle transfer election.” However, “credit transfer election” is a more descriptive and appropriate term, so these final
regulations adopt the defined term “credit transfer election” to refer to the election by a taxpayer to transfer a section 25E or section 30D credit to an eligible entity.

Bulletin No. 2024–22 1245 May 28, 2024
6. Termination
The IRA added new section 30D(h) to
the Code, which provides that no credit is
allowed with respect to any vehicle placed
in service after December 31, 2032.
III. Section 45W
Section 13403(a) of the IRA added sec-
tion 45W to the Code, which is effective
for vehicles acquired after December 31,
2022, and before January 1, 2033. A tax-
payer can claim a section 45W credit for
purchasing and placing in service a quali-
fied commercial clean vehicle, as defined
in section 45W(c), during the taxable year.
Section 45W(e) provides that no section
45W credit is allowed with respect to any
vehicle unless the taxpayer includes the
VIN of such vehicle on the tax return for
the taxable year.
IV. Section 6213(g)(2)
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). Section 13401(i)(4) of the IRA
amended section 6213(g)(2) to provide
the IRS with math error authority for the
omission of a correct VIN required under
sections 25E(d), 30D(f)(9), and 45W(e)
to be included on a return. See section
6213(g)(2)(T)-(V).
V. Notice 2022-46
On October 24, 2022, the Treasury
Department and the IRS published
Notice 2022-46, 2022-43 I.R.B. 306.
The notice requested general comments
on issues arising under sections 25E and
30D. Regarding section 30D, the notice
requested specific comments concerning:
(1) definitions; (2) critical minerals; (3)
battery components; (4) applicable val-
ues; (5) FEOCs; (6) recordkeeping and
reporting; (7) tax-exempt entities; (8)
registered dealers and eligible entities;
(9) the final assembly requirement; (10)
vehicle classifications; (11) elections
to transfer and advance payments; and
(12) recapture. Regarding section 25E,
the notice requested specific comments
concerning: (1) qualification as a “previ-
ously-owned clean vehicle”; (2) the rules
of section 30D(f) that should be applied
under section 25E(e); (3) the rules of sec-
tion 30D(g) that should be applied under
section 25E; and (4) terms that may
require definitions or further guidance.
Stakeholders submitted more than 800
comments in response to Notice 2022-46.
Those comments informed the develop-
ment of the notices of proposed rulemak-
ing relating to sections 25E and 30D dis-
cussed in section VII of this Background
section.
VI. Revenue Procedures
On December 27, 2022, the Trea-
sury Department and the IRS published
Revenue Procedure 2022-42, 2022-52
I.R.B. 565, which sets forth the proce-
dures under section 30D(d)(3) for qual-
ified manufacturers to enter into a writ-
ten agreement with the Secretary under
which such manufacturer agrees to make
periodic written reports to the Secretary
providing VINs and such other informa-
tion related to each vehicle manufactured
by such manufacturer as the Secretary
may require. The revenue procedure
also provides the procedures for persons
selling vehicles to report the informa-
tion required to be reported to the IRS in
order for such vehicles to be eligible for
the section 25E credit or the section 30D
credit.
On October 23, 2023, the Treasury
Department and the IRS published Rev-
enue Procedure 2023-33, 2023-43 I.R.B.
1135. The revenue procedure sets forth
the procedures under sections 25E(f) and
30D(g) for the transfer of the section 25E
credit and the 30D credit from the tax-
payer to an eligible entity. In addition, the
revenue procedure supersedes certain pro-
visions of Rev. Proc. 2022-42.
On December 18, 2023, the Treasury
Department and the IRS published Rev-
enue Procedure 2023-38, 2023-51 I.R.B.
1544. The revenue procedure provides
procedural rules for qualified manufactur-
ers of new clean vehicles to comply with
the reporting, certification, and attesta-
tion requirements regarding the excluded
entity restriction, under which the IRS,
with analytical assistance from the DOE,
will review compliance with the excluded
entity restrictions. In addition, Rev. Proc.
2023-38 updates and consolidates the pro-
cedural rules for qualified manufacturers
with respect to the section 25E credit, the
section 30D credit, and the qualified com-
mercial clean vehicle credit under section
45W. The revenue procedure supersedes
certain provisions of Rev. Proc. 2022-42
and Rev. Proc. 2023-33.
On February 26, 2024, the Treasury
Department and the IRS published Rev-
enue Procedure 2024-12, 2024-9 I.R.B.
677. The revenue procedure provides a
temporary extension of time to submit
seller reports to the IRS under the proce-
dures set out in Rev. Proc. 2022-42 and
Rev. Proc. 2023-33 for the transfer of sec-
tion 25E credits and 30D credits.
VII. Notice 2023-1, Notice 2023-16, and
30D White Paper
On January 17, 2023, the Treasury
Department and the IRS published
Notice 2023-1, 2023-3 I.R.B. 373, which
describes definitions for certain terms in
section 30D that the Treasury Department
and the IRS intended to include in pro-
posed regulations.
The Treasury Department also
released a white paper on the anticipated
direction of the proposed guidance on the
Critical Minerals Requirement and Bat-
tery Components Requirement and the
process for determining whether vehi-
cles qualify under these requirements,
as of December 29, 2022. See “Antic-
ipated Direction of Forthcoming Pro-
posed Guidance on Critical Mineral and
Battery Component Value Calculations
for the New Clean Vehicle Credit,” Dec.
29, 2022, https://home.treasury.gov/sys-
tem/files/136/30DWhite-Paper.pdf (last
accessed March 16, 2024).
On February 21, 2023, the Treasury
Department and the IRS published Notice
2023-16, 2023-8 I.R.B. 479, which modi-
fies Notice 2023-1 by revising the vehicle
classification standard that the Treasury
Department and the IRS intended to pro-
vide in proposed regulations.
VIII. Notices of Proposed Rulemaking
On April 17, 2023, the Treasury Depart-
ment and the IRS published a notice of
proposed rulemaking (REG-120080-22)
in the Federal Register (88 FR 23370),

May 28, 2024 1246 Bulletin No. 2024–22
containing proposed regulations under
section 30D (April Proposed Regula-
tions). The April Proposed Regulations
provided proposed definitions for certain
terms related to section 30D; proposed
rules regarding personal and business
use of new clean vehicles and other spe-
cial rules; and additional proposed rules
related to the Critical Minerals and Bat-
tery Components Requirements of section
30D(e) in proposed §1.30D-3.
On October 10, 2023, the Treasury
Department and the IRS published a notice
of proposed rulemaking (REG-113064-
23) in the Federal Register (88 FR 70310),
which provided proposed guidance for
elections to transfer clean vehicle credits
under sections 25E(f) and 30D(g) (Octo-
ber Proposed Regulations). The October
Proposed Regulations provided proposed
guidance for taxpayers intending to trans-
fer the section 25E credit and the section
30D credit to dealers that are entities
eligible to receive advance payments of
such credits. The October Proposed Reg-
ulations also provided proposed guidance
for how dealers become eligible entities to
receive advance payments of the section
25E credit and the section 30D credit. In
addition, the October Proposed Regula-
tions provided proposed guidance regard-
ing basic and definitional provisions in for
section 25E, recapture of the section 25E
and section 30D credits, and math error
authority under section 6213.
On December 4, 2023, the Treasury
Department and the IRS published a
notice of proposed rulemaking (REG-
118492-23) in the Federal Register (88
FR 84098), which provided guidance
regarding the excluded entities limitation
of section 30D(d)(7) (December Proposed
Regulations). The December Proposed
Regulations provided proposed defini-
tions and proposed rules for qualified
manufacturers of vehicles to determine
eligibility for the section 30D clean vehi-
cle credit regarding the excluded entity
restrictions, under which vehicles placed
in service beginning in 2024 are not eli-
gible if the battery contains battery com-
ponents manufactured or assembled by
a FEOC, and vehicles placed in service
beginning in 2025 are not eligible if the
battery contains applicable critical miner-
als extracted, processed, or recycled by a
FEOC.
IX. Department of Energy Guidance
Concurrently with the release of the
December Proposed Regulations, the
DOE released proposed guidance in the
Federal Register, which provides pro-
posed interpretations of certain terms
used in the definition of FEOC set forth
in section 40207(a)(5) of the Infrastruc-
ture Investment and Jobs Act (IIJA), and
as cross-referenced in section 30D(d)(7).
Concurrently with the release of these
final regulations, the DOE is releasing
final regulations under section 40207(a)
(5) of the IIJA.
Section 40207(a)(5) of the IIJA defines
FEOC to include foreign entities cov-
ered by specific designations, inclusions,
and allegations by Federal agencies as
described in section 40207(a)(5)(A), (B),
and (D), as well as foreign entities ‘‘owned
by, controlled by, or subject to the juris-
diction or direction of a government’’ of
a covered nation under section 40207(a)
(5)(C). Covered nations are defined in 10
U.S.C. 4872(d)(2) as the People’s Repub-
lic of China, the Russian Federation, the
Democratic People’s Republic of Korea,
and the Islamic Republic of Iran, as of
the date of publication of the these final
regulations and the DOE final guidance.
Finally, section 40207(a)(5)(E) of the IIJA
provides that a FEOC includes a foreign
entity that the Secretary of Energy, in con-
sultation with the Secretary of Defense
and the Director of National Intelligence,
determines is engaged in unauthorized
conduct that is detrimental to the national
security or foreign policy of the United
States. The DOE final guidance provides
an interpretation of section 40207(a)(5)
(C) of the IIJA. In particular, the DOE
final guidance provides definitions for the
terms ‘‘government of a foreign country,’’
‘‘foreign entity,’’ ‘‘subject to the jurisdic-
tion,’’ and ‘‘owned by, controlled by, or
subject to the direction of.’’ In general,
an entity incorporated in, headquartered
in, or performing the relevant activities
in a covered nation would be classified
as a FEOC. For purposes of these rules,
an entity would be ‘‘owned by, controlled
by, or subject to the direction’’ of another
entity if 25 percent or more of the entity’s
board seats, voting rights, or equity inter-
est are cumulatively held by such other
entity. In addition, licensing agreements
or other contractual agreements may also
create control. Finally, ‘‘government of a
foreign country’’ is defined to include sub-
national governments and certain current
or former senior foreign political figures.
Summary of Comments and
Explanation of Revisions
The Treasury Department and the IRS
received over 180 written and electronic
comments in response to the April Pro-
posed Regulations, the October Proposed
Regulations, and the December Proposed
Regulations (collectively, the proposed
regulations). A public hearing on the pro-
posed regulations was held on January 31,
2024. Copies of written comments and the
list of speakers at the public hearing are
available at https://www.regulations.gov
or upon request.
After full consideration of the com-
ments received on the proposed regula-
tions and the testimony presented at the
public hearing, this Treasury Decision
adopts the proposed regulations with
clarifying changes and additional modifi-
cations in response to the comments and
testimony as described in this Summary of
Comments and Explanation of Revisions.
Unless otherwise indicated in this
Summary of Comments and Explanation
of Revisions, provisions of the proposed
regulations for which no comments were
received are adopted without substantive
change. Comments that merely summa-
rize the proposed regulations, recom-
mend statutory revisions to section 25E,
section 30D, or other statutes, address
issues that are outside the scope of this
rulemaking (such as proposed changes to
other guidance), or recommend changes
to IRS forms, are beyond the scope of
these regulations and are not adopted. In
addition, comments that relate to the rev-
enue procedures or notices described in
section VI and VII of this Background
section are beyond the scope of these reg-
ulations and are not adopted. The final
regulations include non-substantive mod-
ifications, including modifications that
promote consistency across definitions,
rules, and examples, rearrange provi-
sions, and improve the overall clarity of
the guidance. Such modifications are not
addressed in the Summary of Comments
and Explanation of Revisions.

Bulletin No. 2024–22 1247 May 28, 2024
Section I of this Summary of Comments
and Explanation of Revisions addresses
the comments and revisions applicable
only to section 25E. Section II of this
Summary of Comments and Explanation
of Revisions addresses the comments
and revisions applicable to both section
25E and section 30D. Section III of this
Summary of Comments and Explanation
of Revisions addresses the comments and
revisions applicable only to section 30D.
Section IV of this Summary of Comments
and Explanation of Revisions addresses
the comments and revisions applicable to
section 6213. Section V of this Summary
of Comments and Explanation of Revi-
sions addresses the applicability dates of
these final regulations.
I. Section 25E Credit
A. Definitions
1. Previously-Owned Clean Vehicle
Proposed §1.25E-1(b)(5) defined the
term “previously-owned clean vehicle” by
reference to the statutory definition pro-
vided in section 25E(c)(1). A commenter
noted that the proposed definition of “pre-
viously-owned clean vehicle” does not
address whether a previously-owned vehi-
cle purchased from a dealership would be
eligible for the section 25E credit. Another
commenter requested that the Treasury
Department and the IRS provide a defini-
tion of “vehicle.”
Section 25E(c)(1) provides a defini-
tion of “previously-owned clean vehicle”
and criteria to be considered a “motor
vehicle.” Section 25E(c)(4) defines
“motor vehicle” by reference to section
30D(d)(2), which defines that term as
any vehicle that is manufactured primar-
ily for use on public streets, roads, and
highways (not including a vehicle oper-
ated exclusively on a rail or rails) and
that has at least four wheels. Further,
section 25E(c)(2) defines “qualified sale”
in part, as a sale of a motor vehicle by
the dealer. Under the plain language of
section 25E, a sale of a previously-owned
clean vehicle by a dealer is eligible for
the section 25E credit, provided the other
requirements of section 25E are satisfied.
Accordingly, the final regulations do not
adopt these comments.
The final regulations clarify that vehi-
cles that may qualify as previously-owned
clean vehicles include battery electric
vehicles, plug-in hybrid electric vehi-
cles, fuel cell motor vehicles, and plug-in
hybrid fuel cell motor vehicles.
2. Qualified Sale
i. Motor vehicle reference and price cap
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 that does not exceed $25,000,
and that 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) tracked the statutory definition.
A commenter recommended that the
final regulations substitute “previous-
ly-owned clean vehicle” for “motor vehi-
cle” in the definition of “qualified sale” in
proposed §1.25E-1(b)(8)(i). In addition,
multiple commenters requested changes to
the $25,000 maximum sale price amount
in the definition of “qualified sale.”
Section 25E(c)(2) uses the term “motor
vehicle” in the definition of “qualified
sale.” In order to maintain consistency
with the statutory definition of “qualified
sale,” the final regulations do not adopt
this comment. With regard to the com-
ments suggesting a change to the sale
price limitation, section 25E(c)(2)(B) pro-
vides that the sale price may not exceed
$25,000. Because the $25,000 sale price
limitation is statutory, the final regulations
do not adopt this comment.
ii. First transfer rule
Proposed §1.25E-1(b)(8)(ii) provided
that to be a qualified sale, a transfer must
be the first transfer since August 16, 2022,
as shown by vehicle history, of a previous-
ly-owned clean vehicle after the sale to the
person with whom the original use of such
vehicle commenced. The proposed regu-
lation further provided that the taxpayer
may rely on the dealer’s provision of the
vehicle history in determining whether the
first transfer rule is satisfied.
A commenter recommended that the
final regulations change the term “vehicle
history” to “vehicle history report” in pro-
posed §1.25E-1(b)(8)(ii) and define “vehi-
cle history report” as a report “issued by
an approved provider at www.vehiclehis-
tory.bja/ojp.gov/nmvtis_vehiclehistory.”
The website recommended by the com-
menter provides a list of National Motor
Vehicle Title Information System (NMV-
TIS) approved data providers. This web-
site is maintained by the Department of
Justice. The commenter further suggested
removing the dealer limitation from the
last sentence of proposed §1.25E-1(b)(8)
(ii) and tying the vehicle history report to
the time of sale.
Proposed §1.25E-1(b)(8)(ii) identified
“vehicle history” as the mechanism for
verifying whether a transfer is the first
transfer of the vehicle for purposes of the
qualified sale definition. The Treasury
Department and the IRS agree that sub-
stituting the term “vehicle history report”
for “vehicle history” adds clarity to the
rule. The Treasury Department and the
IRS further agree that requiring the tax-
payer to obtain the vehicle history report
from the dealer is overly restrictive, and
that the vehicle history report should be
obtained at the time of sale or as part of
the sale transaction in order to satisfy the
first transfer rule. Accordingly, the final
regulations adopt these comments. Fur-
ther, the Treasury Department and the
IRS have determined that vehicle history
reports issued by NMVTIS-approved data
providers may be used to verify whether
a transfer is the first transfer of the vehi-
cle. However, the Treasury Department
and the IRS lack sufficient information
to determine whether limiting vehicle
history reports to those issued by NMV-
TIS-approved data providers would place
an undue burden on taxpayers. As a result,
the final regulations adopt the comment,
in part, by adding a definition of “vehicle
history report” and clarifying that the term
includes reports from NMVTIS-approved
data providers.
Another commenter expressed concern
that the proposed first transfer rule is more
restrictive than the statutory language and
could severely limit the applicability of
the section 25E credit. The commenter
suggested that the most straightforward
way to determine if a car had previously
been sold to a qualified buyer would be to
exclude vehicles for which a credit under

May 28, 2024 1248 Bulletin No. 2024–22
25E had previously been claimed. The
commenter recommended that the final
regulations allow one section 25E credit
per VIN (regardless of whether the credit
is claimed with respect to the first transfer
since August 16, 2022, or the first transfer
to a qualified buyer) in place of the pro-
posed first transfer rule.
One of the statutory 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. The comment-
er’s suggestion that the final regulations
adopt a one section 25E credit per VIN
rule is inconsistent with the statutory lan-
guage and Congressional intent, because
it would allow a transfer to a second qual-
ified buyer to be eligible for the credit in
situations where the first qualified buyer
did not claim the section 25E credit or
was not eligible to claim the credit (for
example, if the first qualified buyer’s
MAGI exceeds the limitation). Further,
the commenter’s suggestion, if adopted,
would be unadministrable because tax-
payers have no way of verifying whether
a section 25E credit has previously been
claimed with respect to a prior sale of a
particular vehicle. Such information is
not part of a vehicle history report and
is otherwise inaccessible to taxpayers.
While the IRS has that information, it
cannot share that information without
violating the taxpayer confidentiality
restrictions in section 6103. As a result,
taxpayers making purchasing decisions
would not know which previously sold
vehicles were eligible for the section
25E credit in advance of their vehicle
purchase, which would disincentivize
the purchase of previously-owned clean
vehicles. Accordingly, the final regula-
tions do not adopt this comment.
As for the commenter’s concern that
the proposed first transfer rule is more
restrictive than the statutory language, the
first transfer rule is consistent with how
Congress expected the statute to operate
2

and is necessary to protect confidential
taxpayer information consistent with sec-
tion 6103. Once there has been a sale of
a previously-owned clean vehicle, there
is no information source from which a
subsequent buyer could ascertain or ver-
ify whether the prior sale was to a qual-
ified buyer. For example, vehicle history
reports do not include information as to
whether a previous buyer was an indi-
vidual, whether the previous buyer was a
dependent, or whether the previous buyer
had claimed the section 25E credit in the
prior three years. As noted above, in cases
where the previous buyer has claimed the
section 25E credit, the IRS would have
the information necessary to determine
whether the prior transfer was to a quali-
fied buyer, but such taxpayer information
is protected from disclosure by statute,
under section 6103. The first transfer rule,
by allowing the section 25E credit to the
first transfer after the date of enactment
of 25E as determined by the vehicle’s
vehicle history report, provides certainty
to buyers and dealers in a manner that is
consistent with the taxpayer confidential-
ity mandates of section 6103. In addition,
the proposed first transfer rule is consis-
tent with Congressional intent to incentiv-
ize the deployment of clean vehicles.
The final regulations thus adopt the
proposed first transfer rule without sub-
stantive change. As noted earlier, the first
transfer rule is an element of the definition
of “qualified sale.” The final regulations
merge proposed §1.25E-1(b)(8)(i) and (ii)
and finalize the definition of “qualified
sale” as §1.25E-1(b)(14). Further, the final
regulations move the language regarding
taxpayer reliance on the vehicle history
report from the definition of “qualified
sale” to a standalone rule in §1.25E-1(f),
and clarify that reliance on a vehicle his-
tory report applies in the case where there
has been a prior sale and return or resale
described in §1.25E-2(c). For additional
clarity, the final regulations add an exam-
ple that illustrates how the first transfer
rule works in the context of dealer-to-
dealer transfers.
3. Sale Price
Section 25E(a)(2) and (c)(2)(B) provide
that the sale price of a previously-owned
clean vehicle is taken into account for
purposes of determining the amount of the
section 25E credit and whether a particu-
lar sale is a qualified sale of the vehicle.
Proposed §1.25E-1(b)(9) defined the “sale
price” of a previously-owned clean vehi-
cle as the total sale price agreed upon by
the buyer and dealer in a written contract
at the time of sale, including any deliv-
ery charges and after the application of
any incentives, but excluding separate-
ly-stated taxes and fees required by law.
Under the proposed definition, the sale
price of a previously-owned clean vehicle
was determined before the application of
any trade-in value. Proposed §1.25E-1(b)
(2) provided that for purposes of the defi-
nition of “sale price,” the term “incentive”
means any reduction in total sale price
offered to and accepted by a taxpayer
from the dealer or manufacturer, other
than a reduction, whether in the form of
a partial payment or down payment for
the purchase of a previously-owned clean
vehicle or otherwise, pursuant to section
25E(f) and §1.25E-3.
One commenter requested clarification
regarding the term “incentives,” noting
that manufacturer and distributor rebates
and incentives are typically not available
for previously-owned vehicles. The com-
menter did not reference the proposed
definition of “incentive” in its comment
letter. The proposed definition addresses
the commenter’s concern by broadly
defining “incentive” to include reductions
in price by manufacturers and dealers. In
other words, the proposed definition does
not limit incentives to price reductions
provided by manufacturers and distribu-
tors. Therefore, no clarification is needed.
However, because the term “incentive” is
relevant to both sale price determinations
for purposes the $25,000 sale price cap
in section 25E(c)(2)(B) and the eligible
entity definition in section 30D(g)(2)(B)
(ii) and (D), the final regulations include
separate definitions of “incentive” that
apply to those provisions. In addition,
with regard to the definition of “incentive”
for purposes of sale price determinations,
the final regulations clarify that an “incen-
tive” means any reduction in price offered
2
See Joint Committee on Taxation, General Explanation of Tax Legislation Enacted in the 117
th
Congress (JCS-1-23), December 2023 at page 254.

Bulletin No. 2024–22 1249 May 28, 2024
to and accepted by a taxpayer from the
dealer or manufacturer. This clarification
is necessary because the proposed defini-
tion only looked to incentives available to
taxpayers from the dealer or manufacturer,
which could disadvantage consumers by
artificially lowering the $25,000 sale price
cap in cases where the incentive was not
accepted by the taxpayer.
Several commenters requested mod-
ifications to the proposed definition of
“sale price.” Two commenters requested
a narrower definition. Specifically, one
commenter suggested that the proposed
definition of sale price be amended so
that fees and charges allowed by a state
or locality, such as titling and registra-
tion charges for out-of-state buyers and
charges associated with perfecting a lien-
holder’s security interest, be excluded
from the sale price because the amount
of such fees is not easily knowable at
the time of sale. Another commenter
recommended modifying the proposed
definition of “sale price” to exclude doc-
umentation fees because of long-stand-
ing practice in the automotive industry
to charge such fees to cover a dealer’s
processing and administrative costs asso-
ciated with a sale. The inclusion of dealer
document fees and charges allowed by a
state or locality in the sale price would
allow dealers to allocate a portion of the
sale price of the vehicle to such fees in
order to avoid the $25,000 sale price cap
in section 25E(c)(2)(B). Accordingly, the
final regulations do not adopt these com-
ments.
A commenter suggested the proposed
definition of “sale price” be amended
to include the total transaction amount,
less any government-imposed taxes or
fees, and including all add-ons and any
non-government fees to prevent dealers
from capturing a large portion of the credit
as profit. The proposed definition already
effectively does what the commenter sug-
gests by excluding only separately-stated
taxes and fees as required by law. Accord-
ingly, the final regulations do not adopt
this comment.
4. Other Definitions Applicable to
Section 25E
The Treasury Department and the IRS
received comments related to other defi-
nitions applicable to section 25E that are
also applicable to section 30D. Section II
of this Summary of Comments and Expla-
nation of Revisions discusses comments
received and modifications made to defi-
nitions applicable to both section 25E and
section 30D.
B. Limitations based on Modified AGI
The proposed regulations restated the
Modified AGI limitation of section 25E(b)
at proposed §1.25E-1(b)(3) and (c)(1).
Several commenters suggested that
the qualifying income threshold for the
section 25E credit should be increased.
Because these limitations are statutory,
the final regulations do not adopt this
comment.
C. Branded title
Proposed §1.25E-2(d) provided that a
title to a previously-owned clean vehicle
indicating that such vehicle has been dam-
aged or is otherwise a branded title does
not impact the vehicle’s eligibility for a
section 25E credit.
A commenter suggested that the sec-
tion 25E credit program should not be
used to incentivize consumers to pur-
chase unsafe or unreliable vehicles, such
as those that have been determined to be
a total loss, salvage, or junk, and encour-
aged the Treasury Department and the
IRS to consider making such vehicles
ineligible for the section 25E credit. The
commenter further suggested that title
status reflected in the NMVTIS should be
determinative because all states, insur-
ance companies, and junk and salvage
yards are required by law to regularly
report information about vehicles that
have been determined to be a total loss,
salvage, or junk to NMVTIS.
Vehicle titles indicate whether the
title is clean (meaning the vehicle has
never been declared a total loss) or
branded (indicating the vehicle has
sustained serious damage, such as in
the case of salvage title, or that there is
some other significant problem with the
vehicle, as in the case of a lemon title
brand). State law generally governs the
titling of vehicles. Each State and the
District of Columbia has different stan-
dards for determining when a vehicle
title must be branded. Further, although
there are broad categories of title brands
that are common across jurisdictions,
such as salvage title, the thresholds for
applying those title brands varies. These
variations can lead to the practice of title
washing, which is a method of removing
a title brand by retitling the vehicle in a
jurisdiction that does not recognize the
title brand. The Treasury Department
and the IRS do not want to incentivize
the purchase of unsafe or unreliable
vehicles. However, modifying pro-
posed §1.25E-2(d) to exclude certain
title brands could lead to an increase
in title washing, which, in turn, could
lead to increased fraud regarding previ-
ously-owned vehicles. This would neg-
atively impact consumers of previous-
ly-owned clean vehicles. Moreover, the
statute does not exclude branded titles,
and there is no indication that Con-
gress intended to exclude such vehicles.
Accordingly, the final regulations do not
adopt these comments.
II. Crossover Provisions in Section 25E
and Section 30D
A. Definitions
This section of the Summary of Com-
ments and Explanation of Revisions
addresses definitions that apply to both
section 25E and section 30D. Unless
otherwise specified, the final regulations
move the definitions relating to section
30D from §§1.30D-2, 1.30D-3(c), 1.30D-
5(a), and 1.30D-6(a) to §1.30D-2(b).
1. Dealer
Section 25E(c)(2)(A) cross references
section 30D(g)(8) with regard to the term
“dealer.” Under section 30D(g)(8), the
term “dealer” means a person licensed
by a State, the District of Columbia, the
Commonwealth of Puerto Rico, or any
other territory or possession of the United
States, an Indian tribal government, or any
Alaska Native Corporation to engage in
the sale of vehicles.
Proposed §§1.25E-1(b)(1) and 1.30D-
5(a)(2) defined “dealer” as provided
in section 30D(g)(8), except that the
proposed term did not include persons
licensed solely by a territory of the United

May 28, 2024 1250 Bulletin No. 2024–22
States.
3
Under the proposed regulations,
the term included a dealer licensed in any
jurisdiction 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. The definition of dealer in the
proposed regulations did not include per-
sons 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.
A commenter suggested that the defi-
nition of “dealer” should include licensed
dealers in territories or possessions of the
United States, but only for purposes of
vehicles sold for use and not for resale in
the 50 states or the District of Columbia.
Such a rule would create verification
issues for the IRS and place administrative
burdens on certain dealers and purchasers
of clean vehicles. At a minimum, buyers
purchasing clean vehicles from dealers
licensed in territories of the United States
would be required to provide an attesta-
tion or certificate to the dealer indicating
that the buyer intended to use the vehicle
in the United States and not resell it. In
addition, predominant use of the vehicle
in a territory subsequent to such a state-
ment of intent would make the vehicle
ineligible for a clean vehicle credit. Pur-
suant to section 30D(g)(1), the Secretary
has authority to prescribe necessary reg-
ulations with respect to that subsection.
Accordingly, the final regulations do not
adopt this comment.
A separate comment requested guid-
ance on the circumstances in which an
original equipment manufacturer (OEM)
is considered a “dealer” for purposes of
section 30D(g)(8). In response to this
comment, the Treasury Department and
the IRS note that an OEM may be a dealer
if licensed in any jurisdiction described
in section 30D(g)(8) and §§1.25E-1(b) or
1.30D-2(b), as applicable.
2. Placed in Service
The year in which a vehicle is placed
in service is relevant for a number of
rules under section 25E and section 30D,
including the applicable percentages for
the Critical Minerals and Battery Com-
ponents Requirements of section 30D(e)
and the FEOC Restriction, which impose
manufacturer sourcing requirements for
the clean vehicle battery.
Proposed §§1.25E-1(b)(4) and 1.30D-
2(e) provided that a vehicle is considered
to be placed in service on the date the
taxpayer takes possession of the vehicle.
The proposed definition is consistent with
the meaning of “placed in service” for
purposes of other Code provisions. See
§1.46-3(d)(1)(ii) and (4)(i) and §1.179-
4(e) (property is considered placed in ser-
vice when “placed in a condition or state
of readiness and availability for a specifi-
cally assigned function”); §145.4051-1(c)
(2) (“a vehicle shall be considered placed
in service on the date on which the owner
of the vehicle took actual possession of
the vehicle”); see also §1.1250-4(b)(2)
(“property is placed in service on the date
on which it is first used”); Consumers
Power Co. v. Commissioner, 89 T.C. 710
(1987); Noell v. Commissioner, 66 T.C.
718, 728-729 (1976).
The proposed definition is also con-
sistent with the IRS’s and the Tax Court’s
interpretation of “placed in service” as used
in section 30D(a), which was not amended
by the IRA, and while not precedential or
binding, reflects the prevailing view. See
e.g., Trout v. Comm’r of Internal Reve-
nue, T.C. Summ. Op. 2015-66, 2015 WL
7423818, at *4 (T.C. Nov. 19, 2015) (“[t]
he Court will look at whether the vehicle
was ‘in a condition or state of readiness and
availability’ for the ‘specifically assigned
function’ for which petitioners purchased
it to determine when petitioners placed the
[vehicle] in service.”); Podraza v. Comm’r
of Internal Revenue, T.C. Summ. Op. 2015-
67, 2015 WL 7423525 (T.C. Nov. 19, 2015)
(same); IRS PLR 201312034 (Mar. 22,
2013) (“the taxable year in which the tax-
payer may claim the credit on their return
is defined as the year in which the vehicle
is ‘placed in service,’ which requires that
the taxpayer have actual possession of the
vehicle...”).
The Treasury Department and the IRS
received several comments regarding the
definition of “placed in service.” One
commenter suggested that for purposes
of the section 30D credit, the definition of
“placed in service” be modified to mean
the date of vehicle manufacture. The com-
menter further noted that the proposed
definition will cause significant confusion
for consumers if the clean vehicle they
want to buy is no longer credit-eligible
because the vehicle was not placed in ser-
vice at the correct time.
Several other commenters requested
that “placed in service” be defined as the
date of manufacture for purposes of the
vehicle manufacturing requirements (spe-
cifically, the Critical Minerals and Battery
Components Requirements and the FEOC
Restriction) of section 30D. Another com-
menter raised concerns with the proposed
definition of “placed in service” based on
vehicle possession because some taxpay-
ers: (1) may never take possession of the
vehicle, such as cases involving leases
and gifts, (2) may take possession before a
vehicle is sold, (3) may take possession at
the time a vehicle is sold, or (4) may take
possession after a vehicle is sold, such
as cases in which the taxpayer preorders
a vehicle. The commenter recommended
that the definition of “placed in service”
be the date on which a vehicle is regis-
tered by a United States jurisdiction that
administers on-road vehicle registration
laws.
The final regulations adopt the defi-
nition in proposed §§1.25E-1(b)(4)
and 1.30D-2(e), with minor clarifying
changes, because the definition is con-
sistent with existing guidance, as well
as case law relating to when a vehicle is
placed in service. Further, the Treasury
Department and the IRS do not adopt a
definition of “placed in service” for pur-
poses of the Critical Minerals and Battery
Components Requirements and the FEOC
Restriction that differs from the definition
for purposes of section 30D(a), because in
cases in which the same term is used in
a single section the term is presumed to
have the same meaning throughout. Mer-
tens v. Hewitt Assocs., 508 U.S. 248, 260,
113 S.Ct. 2063, 124 L.Ed.2d 161 (1993).
Accordingly, the final regulations do not
adopt these comments.
3
Section 30D(g)(8) uses the term “territory or possession,” but the proposed regulations and these final regulations use the term “territory” since both terms have the same meaning.

Bulletin No. 2024–22 1251 May 28, 2024
3. Sale
The term “sale” is not defined in sec-
tion 25E, section 30D, or the proposed
regulations applicable to those sections.
A commenter suggested that a definition
of the term “sale” be added to the final
regulations for purposes of sections 25E
and 30D. The commenter recommended
that the term “sale” be defined as “an
enforceable contract to transfer owner-
ship of a vehicle from a dealer to a tax-
payer.”
The term “sale” is relevant to the deter-
mination of whether there is a qualified
sale for purposes of section 25E(c)(2) and
the applicable recapture provisions under
sections 25E and 30D. The commenter’s
proposed definition is overly broad and
would not require that the transfer of own-
ership be made for consideration provided
by the buyer. Further, section 25E(a) pro-
vides that the section 25E credit is only
allowed for a qualified sale of a previous-
ly-owned clean vehicle. Section 25E(c)(2)
(A) defines the term “qualified sale,” in
part, as a sale by a dealer. Similarly, the
credit transfer election framework incen-
tivizes the purchase of previously-owned
clean vehicles and new clean vehicles
from dealers. Dealers have well-estab-
lished practices with regard to vehicle
sales and what constitutes a sale transac-
tion. Based on the foregoing, the Treasury
Department and the IRS have determined
that a definition of “sale” is unnecessary.
Accordingly, the final regulations do not
adopt this comment.
B. Special rules
1. Recapture
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 benefit
of any section 30D credit with respect to
any property that ceases to be eligible for
the section 30D credit. Proposed §§1.25E-
2(c) and 1.30D-4(d) provided correspond-
ing rules under section 30D(f)(5) for can-
celled sales, returns, and resales of the
vehicle. The final regulations clarify that
for purposes of section 30D(f)(5), and by
extension, section 25E(e), the amount of
the benefit recaptured due to such an event
is considered an increase to tax imposed
by chapter 1 of the Code.
i. Cancelled sale
Proposed §§1.25E-2(c)(1)(i) and
1.30D-4(d)(1)(i) provided the Federal
income tax consequences that apply if
the sale of a vehicle between the taxpayer
and seller is cancelled before the tax-
payer places the vehicle in service (that
is, before the taxpayer takes possession of
the vehicle).
A commenter recommended that part
of the definition of “cancelled sale” be
changed from “taxpayer places the vehi-
cle in service” to “the vehicle is placed
in service.” Section 25E(a) expressly
requires the previously-owned clean vehi-
cle to be placed in service by a qualified
buyer. Similarly, section 30D(a) expressly
requires the new clean vehicle to be
placed in service by the taxpayer. Accord-
ingly, the final regulations do not adopt
this comment because a clean vehicle
placed in service by someone other than
the qualified buyer or taxpayer, as applica-
ble, would not qualify for the credit.
ii. Vehicle returns
Proposed §§1.25E-2(c)(1)(ii) and
1.30D-4(d)(1)(ii) addressed 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.
The Treasury Department and the IRS
received multiple comments regarding
the proposed vehicle return rules in pro-
posed §§1.25E-2(c)(1)(ii) and 1.30D-4(d)
(1)(ii). A commenter requested that the
final regulations clarify that once a con-
tract for the purchase of a clean vehicle is
signed by the buyer and seller, the 30-day
return period is for credit recapture pur-
poses only and that state contract law
governs whether the buyer can void the
sale. One commenter agreed that 30 days
is an appropriate length of time for qual-
ified vehicle returns. Another commenter
recommended deleting the 30-day lim-
itation. That commenter also suggested
changing “of placing such vehicle in ser-
vice” to “after it is placed in service” and
“the vehicle history” to “a vehicle history
report as of the date of such sale.” In addi-
tion, a commenter recommended that, in
general, the Treasury Department and the
IRS regulate returns after the vehicle is
registered.
Dealers generally have return policies
that range from several days up to 30 days,
so the proposed rules regarding returns
within 30 days reflect industry practice.
The final regulations maintain the 30-day
return rule, with one modification. Specif-
ically, the final regulations, for purposes
of 25E, modify the reference to “the vehi-
cle history” by changing it to “a vehicle
history report obtained on the date of such
subsequent sale or as part of such subse-
quent sale transaction” to conform with
modifications to the definition of “quali-
fied sale” described in section I.A.2 of this
Summary of Comments and Explanation
of Revisions. The final regulations also
add a definition of “vehicle history report”
and clarify that the term includes reports
from NMVTIS-approved data providers.
In addition, the Treasury Department and
the IRS confirm that the vehicle return
rules in the final regulations relate only
to the section 25E and 30D credits and
have no impact on the voidability of the
sales contract for the clean vehicle, which
is governed by state contract law. Other-
wise, the final regulations do not adopt
these comments.
2. Resales
Proposed §§1.25E-2(c)(1)(iii) and
1.30D-4(d)(1)(iii) treat the taxpayer as
having purchased a clean vehicle with an
intent to resell such vehicle if the resale
occurs within 30 days of the taxpayer
placing the vehicle in service.
A commenter noted that it largely
agreed with the proposed resale rules,
but suggested that for purposes of sec-
tion 25E, the final regulations include an
exception for subsequent sales by dealers
that are unaware of prior resales as of the
date of the subsequent sale. The com-
menter did not suggest an exception for
purposes of section 30D resales given that
a resale of a vehicle will render it used,
thereby making the vehicle ineligible for
the section 30D credit. The commenter
also suggested changing “placing the
vehicle” in service to “it being placed” in
service. Another commenter stated that 30

May 28, 2024 1252 Bulletin No. 2024–22
days is an appropriate length of time for
the resale rule.
The recapture rule in proposed
§1.25E-2(c)(1)(iii) did not address sales
by dealers. Proposed §1.25E-2(c)(1)
(iii) addressed sales by individual buyers
within 30 days and provided that recap-
ture in the event of such resale is recap-
tured from the taxpayer, not the dealer.
Accordingly, the final regulations retain
the rules in proposed §§1.25E-2(c)(1)(iii)
and 1.30D-4(d)(1)(iii) and do not adopt
these comments.
3. Other returns or resales
Proposed §§1.25E-2(c)(1)(iv) and
1.30D-4(d)(iv) provided a rule for
returns or resales occurring more than
30 days after the date on which the tax-
payer places the vehicle in service. Gen-
erally, taxpayers returning or reselling
a clean vehicle more than 30 days after
the date the taxpayer places it in service
will remain eligible for the section 25E
or section 30D credit for the purchase of
such vehicle. The proposed regulations
provided that, in the case of a new clean
vehicle that is returned or resold, the
vehicle, once returned or resold, is not
available for original use by another tax-
payer and, therefore, is not eligible for a
section 30D credit. Similarly, in the case
of a previously-owned clean vehicle that
is returned or resold, the vehicle, once
returned or resold, is generally not eligi-
ble for the section 25E credit upon a sub-
sequent sale pursuant to the first transfer
rule described in proposed §1.25E-1(b)
(8)(ii). In the case of a return occurring
more than 30 days after the date on which
the taxpayer places the vehicle in ser-
vice, the seller report is not required to
be updated because the taxpayer gener-
ally 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 knowl-
edge of the subsequent resale. Finally, if
the taxpayer made an election to trans-
fer the clean vehicle credit, that credit
transfer election remains in effect and the
value of any transferred credit pursuant
to the clean vehicle credit transfer rules
generally is not subject to recapture and
is not an excessive payment.
Although the proposed regulations did
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, based upon the
facts and circumstances of a particular
case, that a clean vehicle was purchased
with the intent to return or resell and may
disallow the clean vehicle credit in such
case.
One commenter noted that dealers reg-
ularly place new clean vehicles in use for
longer than 30 days as loaners, rentals, or
company vehicles, and that the period of
time the vehicle is in use varies but is nor-
mally longer than 30 days. The commenter
suggested that the section 30D credit
obtained by the dealer on its purchase of
the vehicle should not be recaptured if,
after a period of more than 30 days of use
as a loaner, the dealer reclassifies the vehi-
cle as used and subsequently sells it to a
third party. The commenter requested the
addition of an example to the final regula-
tions addressing this scenario.
The final regulations adopt the com-
ment and add an example to §1.30D-4(e)
that illustrates the application of the vehi-
cle return rules to a scenario in which the
dealer purchases a new clean vehicle, uses
it as a demonstrator, and later sells the
vehicle.
4. Recapture after transfer election
One commenter requested that an
example be added to the final regulations
that addresses who would be responsi-
ble for repaying a credit in the event the
taxpayer made an election to transfer the
credit and later learned that the sale of the
previously-owned clean vehicle to the tax-
payer was not a qualified sale.
In general, whether the sale of a pre-
viously-owned clean vehicle is a qualified
sale will be determined at the time of sale.
For example, the taxpayer may rely on
the vehicle history report obtained at the
time of sale or as part of the sale transac-
tion to determine whether the first transfer
rule is satisfied. In the case of recapture,
as described in §§1.25E-2(c) and 1.30D-
4(e), responsibility for recapture of a
clean vehicle credit depends upon the cir-
cumstances of recapture. In the case of a
vehicle return within 30 days of placing
a clean vehicle in service in which the
taxpayer made a credit transfer election,
the eligible entity must repay the amount
of the credit as an excessive payment. In
contrast, if the taxpayer resells the vehicle
within 30 days of placing the clean vehicle
in service rather than returning it to the eli-
gible entity, the amount of the transferred
credit is recaptured from the taxpayer.
Another commenter requested addi-
tional information about specific proce-
dures regarding recapture, including clar-
ification as to whether both parties would
be notified, how such notification might
occur, and when recapture would occur.
Generally, recapture is reported via
self-assessment by the eligible entity
or taxpayer. In the event of recapture
from the eligible entity, the eligible
entity must report the recapture via the
dealer registration system as described
in §§1.25E-3(c)(1) and 1.30D-5(c)(1), as
finalized. In the event of recapture from
the taxpayer, the taxpayer must report
the recapture amount as an increase in
tax imposed by chapter 1 of the Code on
the taxpayer’s Federal income tax return
for the taxable year in which the recap-
ture occurred.
A commenter requested that the final
regulations clarify whether a taxpayer
would be liable for repayment of the
credit or a portion of the credit if a trans-
fer election is made but the taxpayer’s
regular tax liability is less than the total
amount of the credit transferred. With
respect to the section 25E credit, this sit-
uation is addressed in proposed §1.25E-
3(e)(1)(i) and proposed §1.25E-3(e)(5)
Example 1. With respect to the section
30D credit, this situation is addressed in
proposed §1.30D-5(e)(1)(i) and §1.30D-
5(e)(5) Example 1. These provisions and
examples are adopted in the final regu-
lations at §1.25E-3(e)(1)(i), §1.25E-3(e)
(5) Example 1, §1.30D-5(e)(1)(i), and
§1.30D-5(e)(5) Example 1. Accordingly,
no additional clarification is needed and
the final regulations do not adopt this
comment.
5. Requirement to File a Complete
Income Tax Return
Proposed §§1.25E-2(f) and 1.30D-
4(g) provided that taxpayers must file an
income tax return, together with Sched-
ule A (Form 8936), Clean Vehicle Credit

Bulletin No. 2024–22 1253 May 28, 2024
Amount, or successor form, and any addi-
tional forms, schedules, or statements
prescribed by the Commissioner for the
purpose of making a return to report
the tax under chapter 1 of the Code that
includes all of the information required
on the forms and in the instructions, for
the taxable year in which the clean vehicle
is placed in service to be entitled to the
credit under section 25E or section 30D.
The final regulations under section 30D
clarify that this requirement also applies
to information returns because a partner-
ship or S corporation may claim a section
30D credit as a general business credit
under section 38.
A commenter noted that some taxpay-
ers may transfer a credit to a dealer and
then fail to file a return or fail to attach
Form 8936 to their return, and that dealers
will have little incentive to inform tax-
payers of their future filing obligations in
order to qualify for the credit. The com-
menter recommended that the final regu-
lations clarify that failing to file a return or
failing to attach Form 8936 to a return will
not alone subject the taxpayer to the credit
recapture rules.
Proposed §§1.25E-3(h) and 1.30D-5(g)
provide a reporting requirement for tax-
payers who transfer a section 25E credit
or section 30D credit to a dealer, but do
not provide for recapture of the credit as
a consequence of failing to fulfill these
requirements. Although a taxpayer may
not otherwise be required to file an income
tax return for a particular taxable year, the
taxpayer is required to file an income tax
return and attach a Form 8936 and Sched-
ule A (Form 8936) to ensure timely pro-
cessing of their tax return and to demon-
strate their eligibility for the credit. This
reporting requirement assists the IRS in
the collection of accurate information
necessary to effectively administer the
section 25E and section 30D credits. The
statutory text provides the IRS with suffi-
cient authority to impose this requirement
to ensure program integrity, including the
ability to recapture the credit where nec-
essary. See sections 25E(f), 30D(g)(1)
and 30D(g)(10); see also section 6011.
Accordingly, a clarification has been made
in the final regulations. The final regula-
tions regarding credit transfer elections
under section 30D also clarify that this
includes information returns.
C. Transfer rules
1. Disclosure and assurance
Section 30D(g) generally establishes a
set of rules under which a taxpayer may
transfer a section 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. In exchange, the eligible 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 vehicle).
Section 25E(f) provides that, for purposes
of section 25E, rules similar to the rules of
section 30D(g) apply.
Proposed §§1.25E-3 and 1.30D-5 pro-
vided transfer rules under section 30D(g)
(and section 25E(f) by cross reference to
section 30D(g)), including the establish-
ment of an advance payment program for
such transfers. The proposed regulations
did not specifically address the require-
ments under section 30D(g)(2)(B)(ii) and
(D) relating to the disclosure by the dealer
of other incentives.
A commenter requested that the final
regulations define the term “incentive”
for purposes of the disclosure requirement
and suggested a definition similar to the
one in proposed §1.25E-1(b)(2). The com-
menter also requested that the final regu-
lations provide an attestation for dealers
and taxpayers to use in conjunction with
creditable sales to satisfy the assurance
requirement.
The Treasury Department and the IRS
agree that the final regulations should
include a definition of “incentive” for pur-
poses of section 30D(g)(2)(B)(ii) and (D).
Because the section 30(g) credit transfer
rules also apply to section 25E by reason
of the cross reference in section 25E(f),
the definition of “incentive” for the section
25E and 30D eligible entity requirements
should align. Accordingly, the final regu-
lations add a definition of “incentive” to
§§1.25E-1(b) and 1.30D-5(b) that applies
for purposes of the eligible entity require-
ments. Under that definition, “incentive”
means any reduction in price available to
the taxpayer from the dealer or manufac-
turer, including as in combination with
other incentives, other than a reduction
in the form of a partial payment or down
payment for the purchase of a clean vehi-
cle pursuant to section 30D(g)(2)(C).
2. Definitions
Proposed §§1.25E-3(b) and 1.30D-
5(a) provided definitions that apply for
purposes of the transfer of a clean vehicle
credit.
i. Advance payment program
Proposed §§1.25E-3(b)(1) and 1.30D-
5(a)(1) defined “advance payment pro-
gram” as the program described in sec-
tion 30D(g)(7) (and section 25E(f) by
cross reference to section 30D(g)) and the
proposed regulations under which an eli-
gible entity may receive an advance pay-
ment from the IRS in the case of a credit
transfer election made by an electing
taxpayer. The advance payment program
is the exclusive means by which an eligi-
ble entity may receive a transferred clean
vehicle credit.
Several commenters requested that the
section 25E and 30D credits be refundable
regardless of tax liability. Other comment-
ers requested that the credits be available
for a taxpayer to use as a down payment
at the time of the sale. In contrast, another
commenter, requested that taxpayers with-
out sufficient tax liability be required to
repay the excess credit amount because,
the commenter argued, Congress intended
for the credit to be a non-refundable
credit. One commenter requested clarifi-
cation on how the credit will work in 2024
and beyond compared to previous years.
Another commenter suggested that the
proposed regulations allow 30D credits to
be carried forward.
The section 25E and 30D credits are
nonrefundable credits under the Code that
cannot be carried forward; however, pur-
suant to sections 25E(f) and 30D(g), such
credits may be transferred to an eligible
entity beginning in 2024, regardless of the
tax liability of the taxpayer or the eligible
entity for the applicable tax year. Sections
25E(f) and 30D(g) do not provide for
repayment in the event of insufficient tax
liability. In exchange for the transferred
credit, the eligible entity must pay the tax-
payer an amount equal to the transferred
clean vehicle credit, with such payment

May 28, 2024 1254 Bulletin No. 2024–22
being made either in cash or in the form
of a partial payment or down payment for
the purchase of the vehicle. The proposed
regulations described the transfer of the
clean vehicle credits, including examples
of cases in which a taxpayer may not have
sufficient tax liability to claim the full
amount of the credit (for example, Exam-
ple 1 of proposed §1.30D-5(d)(5)(i)).
Accordingly, the final regulations do not
adopt the comment to require repayment
of an excess credit amount. Proposed
§§1.25E-3 and 1.30D-5 already provided
the other rules requested by commenters,
and no additional clarification is needed.
Accordingly, no changes are needed in
the final regulations to address these com-
ments.
ii. Electing taxpayer
Under proposed §§1.25E-3(b)(3) and
1.30D-5(a)(4), “electing taxpayer” means
the individual 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.
A commenter requested that busi-
nesses that purchase new clean vehi-
cles be allowed to use the credit transfer
option under section 30D(g). Because the
election to transfer a credit under section
30D(g) is limited to the credit allowable
under section 30D, the Treasury Depart-
ment and the IRS have determined that a
taxpayer may not elect to transfer a gen-
eral business credit for a new clean vehi-
cle allowable under section 38 pursuant to
section 30D(c)(1). Proposed §1.30D-1(b)
(1) provided that in the event a deprecia-
ble vehicle’s use is 50 percent or more
business use in the taxable year the vehi-
cle is placed in service, it will be credit-
able entirely under section 38 as a general
business credit rather than under section
30D. Thus, the use of a new clean vehi-
cle must be predominantly personal for a
taxpayer to be able to make the election
to transfer the credit under section 30D(g).
Accordingly, the final regulations do not
adopt this comment.
iii. Eligible entity
Under proposed §§1.25E-3(b)(4) and
1.30D-5(a)(5), “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.
A commenter suggested clarifying that
an eligible entity is a registered dealer
that is eligible to receive payments under
the advance payment program by virtue
of meeting the statutory and regulatory
requirements. Proposed §§1.25E-3(b)(4)
and 1.30D-5(a)(5) already provided the
rule requested in this comment, and no
additional clarification is needed. Accord-
ingly, the final regulations do not adopt
this comment.
iv. Time of sale
Under proposed §§1.25E-3(b)(6) and
1.30D-5(a)(7), “time of sale” means the
date the clean vehicle is placed in service.
Under the proposed regulations, the date
the clean vehicle is placed in service is the
date the taxpayer takes possession of the
vehicle.
A commenter suggested that “time of
sale” be defined as the date of sale on
the seller report, and noted that physical
possession may occur before, after, or at
the time of sale (or at no time) and is not
relevant to when a sale has occurred. The
date a taxpayer takes possession of the
vehicle is a date certain that completes
the transaction of purchasing a vehicle,
whereas a date on the seller report does
not guarantee the taxpayer will take pos-
session of the vehicle and place it in ser-
vice. As discussed in section II.A.2 of this
Summary of Comments and Explanation
of Revisions, defining “placed in service”
as the date a taxpayer takes possession of
the vehicle is consistent with other provi-
sions of the Code and prior interpretations
of section 30D(a). Accordingly, the final
regulations do not adopt this comment.
3. Dealer Registration
Proposed §§1.25E-3(c)(2) and 1.30D-
5(b)(2) provided rules regarding dealer
tax compliance. Specifically, the proposed
regulations provided that 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
nonetheless to become a registered dealer.
However, the proposed regulations pro-
vided that in such cases the dealer can-
not receive advance payments under the
advance payment program until the deal-
er’s tax compliance issue is resolved. This
is because the dealer, while registered, is
not an eligible entity until it comes into
dealer tax compliance.
One commenter suggested creating an
exemption from the dealer tax compliance
requirement to address the unique nature
of its sales model in which all advance
payments of transferred credits ultimately
reside with the corporate parent and not
with one of the subsidiaries in the organi-
zation structure that may be deemed out of
tax compliance.
A commenter asserted that dealers
play a purely ministerial role in the credit
transfer process, and their tax compli-
ance status does not impact the dealer’s
ability to facilitate a credit transfer. The
commenter requested that to the extent
the final regulations do not remove the
dealer tax compliance provision, the
compliance lookback period should be
for a maximum of three years rather
than the five provided in the proposed
regulations. In addition, the commenter
requested that the final regulations clarify
that the dealer tax compliance require-
ment applies for advance payment pur-
poses only and has no impact on a reg-
istered dealer’s sales or seller reporting.
Pursuant to section 30D(g)(1) and
(g)(7), participation in the advance pay-
ment program is elective and is subject
to the requirements and conditions that
the Secretary determines necessary.
An advance payment system for deal-
ers presents unique tax administration
challenges because it involves the IRS
making payments to dealers regardless
of their tax liability and doing so outside
of the normal tax filing system, with its
built-in compliance and enforcement
mechanisms. The dealer tax compliance
requirement ensures that the entities
receiving advance payments have satis-
fied their own Federal tax obligations,
which aids in fraud prevention and tax
administration. For these reasons, the
final regulations retain the dealer tax
compliance requirement. Further, the
final regulations retain the five-year look-
back period because the longer period
better facilitates the IRS’s ability to deter-

Bulletin No. 2024–22 1255 May 28, 2024
mine whether there are enforcement con-
cerns with regard to a particular dealer.
The final regulations also add an express
statement that dealer tax compliance is
required before describing the conse-
quences of noncompliance. No clarifi-
cation is needed regarding the scope of
the dealer tax compliance requirement
because it is clear from the placement of
the requirement in the provisions relating
to the transfer of the section 25E and 30D
credits that such requirement applies only
for purposes of the advance payment pro-
gram and not for other dealer activities,
such as the issuance of seller reports.
4. Form of Payment from Eligible Entity
to Electing Taxpayer
Proposed §§1.25E-3(e)(3) and 1.30D-
5(d)(3) provided that the Federal income
tax treatment of the payments associated
with a credit 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.
A commenter noted that in some states,
dealers are prohibited under state law to
promise to pay or otherwise tender cash
if a vehicle is financed. The commenter
recommended that the credit transfer elec-
tion be available only for a reduction in
sale price without the payment of cash in
states where cash payments from dealers
for financed vehicles are prohibited under
state law. Proposed §§1.25E-3(e)(3) and
1.30D-5(d)(3) included examples that
illustrate the application of the payment
rules referenced by the commenter. The
examples in proposed §§1.25E-3(e)(5)(ii)
and 1.30D-5(d)(5)(ii) address a scenario
in which the eligible entity makes the pay-
ment to the electing taxpayer in the form
of a reduction in sale price (rather than as
cash) and concluded that the eligible entity
is eligible to receive an advance payment.
Although addressed in the examples,
reductions in sale price are not explicitly
addressed in proposed §§1.25E-3(e)(3)
and 1.30D-5(d)(3), which articulate the
rules illustrated in the examples. Accord-
ingly, the final regulations adopt proposed
§§1.25E-3(e)(3) and 1.30D-5(d)(3) with
language clarifying that reductions in sale
price are acceptable forms of payment by
an eligible entity.
5. Vehicle identification number
requirement
Proposed §§1.25E-2(e)(4) and 1.30D-
5(d)(4) impose certain additional require-
ments for credit transfer elections. Among
those rules, the proposed regulations pro-
vided that the vehicle identification number
requirements of section 30D(f)(9) and, by
reason of section 25E(e), section 25E(d),
would be treated as satisfied if the eligi-
ble entity provides the vehicle identifica-
tion number of such vehicle to the IRS in
the form and manner set forth in guidance
published in the Internal Revenue Bulletin.
The final regulations, consistent with the
Secretary’s general authority under sec-
tion 30D(g)(1), provide that the electing
taxpayer must provide its vehicle identi-
fication number with its Federal income
tax return for the taxable year in which the
vehicle is placed in service. Reporting of
the vehicle identification number by both
the electing taxpayer and the eligible entity
is necessary to reconcile the advance pay-
ments under the credit transfer program
with the eligibility of the electing taxpayer,
which helps safeguard program integrity.
6. Increases in Tax
i. Recapture from taxpayer
Section 30D(g)(10) provides that, in
the case of any taxpayer who has made
a credit transfer election 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 limitation, the tax
imposed on such taxpayer under chapter 1
of the Code 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 sec-
tion 25E(f) cross references to section
30D(g), similar rules apply with respect to
the section 25E credit.
Proposed §§1.25E-3(g)(1) and 1.30D-
5(f)(1) provided that, in the case of a
clean vehicle credit that would otherwise
not be allowable to a taxpayer that made
a credit transfer election because the tax-
payer exceeds the limitation based on
Modified AGI, the income tax imposed on
the taxpayer under chapter 1 of the Code
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 credit transfer
election. The taxpayer in such a case must
report recapture of the additional amount
on its income tax return for the taxable
year during which the vehicle was placed
in service.
A commenter suggested that §§1.25E-
3(g)(1) and 1.30D-5(f)(1) should be
revised to apply recapture to taxpayers
purchasing clean vehicles for resale or
for primarily nonpersonal use. Regarding
the purchase for resale aspect of this com-
ment, proposed §§1.25E-2(c)(1)(iii)(E)
and 1.30D-4(f)(1)(iii)(E) provided that
the value of any transferred credit will be
collected from the taxpayer in the event
the taxpayer resells the vehicle within
30 days of placing the vehicle in ser-
vice. Therefore, the proposed regulations
already addressed the purchase for resale
aspect of this comment and further clar-
ification is not necessary. Regarding the
aspect of the comment related to recapture
in the event of primary nonpersonal use
of the vehicle, Revenue Procedure 2023-
33 provides that a taxpayer must attest to
the IRS under penalty of perjury that the
taxpayer is an individual for purposes of
section 25E, or that the taxpayer will use
the vehicle predominantly for personal
use for purposes of section 30D. Because
nonpersonal use of vehicles is adequately
addressed in sub-regulatory guidance,
additional clarification is not necessary.
Accordingly, the final regulations do not
adopt this comment.
Another commenter requested that the
final regulations clarify who is respon-
sible for recapture and under what cir-
cumstances. The final regulations, as
described in this section of the Summary
of Comments and Explanation of Revi-
sions, make clear who is subject to recap-
ture. Accordingly, the final regulations do
not adopt this comment.
Based on the foregoing, the final reg-
ulations adopt proposed §§1.25E-2(c)(1)
(iii)(E) and 1.30D-4(f)(1)(iii)(E) without
modification.
ii. Excessive payment to an eligible entity
Section 30D(g)(7)(B) and section
25E(f) (by cross reference to section

May 28, 2024 1256 Bulletin No. 2024–22
30D(g)) provide that rules similar to
the rules of section 6417(d)(6) apply
for purposes of the advance payment
program. Proposed §§1.25E-3(g)(2)
and 1.30D-5(f)(2) provided 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 of the Code, 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 proposed
regulations further provided that the rule
applies regardless of whether such entity
would otherwise be subject to chap-
ter 1 tax. The additional amount of 20
percent, 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 provided that
an excessive payment means, with respect
to an advance payment to an eligible
entity pursuant to a credit transfer 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. Additionally, the proposed
regulations define “excessive payment” as
an advance payment 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 payment attrib-
utable to a taxpayer exceeding the limita-
tion based on Modified AGI is not treated
as an excessive payment to an eligible
entity.
A commenter requested clarification
that “reasonable cause” includes an eligi-
ble entity’s reliance on a manufacturer’s
calculations for purposes of the Criti-
cal Minerals and Battery Components
Requirements, as shown on https://fuele-
conomy.gov or elsewhere. Specifically,
the commenter requested that the final
regulations clearly provide that eligible
entities will not be liable for mistaken
determinations with respect to those
requirements.
Section 4.03 of Revenue Procedure
2022-42 provides that a taxpayer may
rely on the information and certifications
(which include certifications with respect
to the Critical Minerals and Battery Com-
ponents Requirements and the FEOC
Restriction) contained in the qualified
manufacturer’s periodic written reports.
Therefore, in the case of a mistaken cal-
culation by the qualified manufacturer in
a periodic written report, the taxpayer is
not denied the section 30D credit. Accord-
ingly, if that taxpayer transfers the credit
under the advance payment program, the
excess of the advance payment to the
dealer over the credit otherwise allowable
to the taxpayer would be zero, and there
is no excessive payment under proposed
§1.30D-5(f)(2)(iii). Consequently, the eli-
gible entity would have no liability and no
need to demonstrate reasonable cause. For
clarity, the final regulations incorporate
the provisions of section 4.03 of Revenue
Procedure 2022-42 regarding taxpayer
reliance on manufacturer certifications
regarding qualified manufacturer status,
and certifications and information a qual-
ified manufacturer provides to the IRS in
periodic written reports. The final regula-
tions also delineate what taxpayer reliance
means in this context. In addition, the final
regulations add an example to §§1.25E-
2(g) and 1.30D-5(g)(3) that illustrate that
an excessive payment does not arise in the
situation described by the commenter.
7. Two Credit Transfer Elections per Year
Proposed §§1.25E-3(i) and 1.30D-
5(h) provided that a taxpayer may make
no more than two credit transfer elections
per taxable year. The proposed regulations
further provided that in the case of a joint
income tax return, each spouse may make
two transfer elections per taxable year, for
a maximum of four credit transfer elec-
tions in a taxable year. These proposed
rules were intended to ensure program
integrity by limiting credit transfer elec-
tions to vehicle sales that appear to be for
legitimate nonbusiness individual use.
A commenter recommended that the
requirements of proposed §§1.25E-3(i)
and 1.30D-5(h) be deleted because there is
no basis in section 25E or section 30D for
these restrictions. The commenter noted
that an eligible entity working with a tax-
payer on a credit transfer would have no
ability to determine whether the taxpayer
would have already made two transfer
elections. Section 30D(g)(1) provides that
the credit transfer election is “[s]ubject to
such regulations or other guidance as the
Secretary determines necessary.” Section
25E(f) adopts section 30D(g) by refer-
ence. Therefore, the Treasury Department
and the IRS have the authority to regulate
the credit transfer election to ensure pro-
gram integrity and sound tax administra-
tion. Moreover, pursuant to Revenue Pro-
cedure 2023-33, the taxpayer will attest to
the IRS directly that they have not made
more than two transfer elections per year,
and the dealer may rely on the taxpayer’s
attestation. Accordingly, the final regula-
tions do not adopt this comment.
III. New Clean Vehicle Credit – Section
30D
A. Definitions
Section 1.30D-2 of the April Proposed
Regulations provided general definitions
related to the section 30D credit. Section
1.30D-3(c) of the April Proposed Reg-
ulations provided definitions applicable
for purposes of the Critical Minerals and
Battery Components Requirements. Sec-
tion 1.30D-6(a) of the December Pro-
posed Regulations provided definitions
applicable for purposes of the FEOC
Restriction. In the Explanation of Provi-
sions to the December Proposed Regula-
tions, the Treasury Department and the
IRS noted that terms relevant to both the
Critical Minerals and Battery Compo-
nents Requirements described in proposed
§1.30D-3 and the FEOC Restriction of
proposed §1.30D-6 should be interpreted
consistently between those provisions.
Consistent with this statement, the
final regulations retain proposed §1.30D-
2, with certain modifications described
in this section of the Summary of Com-
ments and Explanation of Revisions, and
generally move the definitions from pro-
posed §1.30D-3 and proposed §1.30D-6
to §1.30D-2(b). However, the final reg-
ulations, under §1.30D-3, retain certain
definitions that are directly relevant to the
calculations under the Critical Minerals

Bulletin No. 2024–22 1257 May 28, 2024
and Battery Components Requirements;
those definitions are cross-referenced in
§1.30D-2(b). Section 1.30D-2(b) also
cross-references definitions in proposed
§1.30D-5, which provides rules for the
credit transfer election (described in sec-
tion II.C of this Summary of Comments
and Explanation of Revisions).
The discussion in this section of the
Summary of Comments and Explanation
of Revisions only addresses new defini-
tions, definitions that have been modified,
or definitions for which comments were
received.
1. Applicable Critical Mineral
Proposed §§1.30D-3(c)(1) and 1.30D-
6(a)(1), consistent with section 30D(e)(1),
defined an “applicable critical mineral” as
an applicable critical mineral defined in
section 45X(c)(6).
In addition, proposed §1.30D-6(c)(4)
(ii)(A) provided that the determination
of whether an applicable critical mineral
is FEOC-compliant takes into account
each step of extraction, processing, or
recycling through the step in which such
mineral is processed or recycled into a
constituent material, even if the mineral
is not in a form listed in section 45X(c)
(6) at every step. Proposed §1.30D-6(c)
(4)(ii)(A) provided an exception to this
general rule in the case of recycling (as
discussed in this Summary of Comments
and Explanation of Revisions at section
III.A.25). Proposed §1.30D-6(c)(4)(ii)
(C) further provided that, for purposes of
determining whether an applicable critical
mineral is FEOC-compliant, an applicable
critical mineral is disregarded if it is fully
consumed in the production of the constit-
uent material or battery component and no
longer remains in any form in the battery.
Several commenters asked for clarifica-
tion with respect to graphite. Specifically,
the commenters requested clarification as
to whether graphite that is of a purity of
less than 99.9 percent graphitic carbon,
but that is purified to a minimum purity of
99.9 percent carbon, is an applicable crit-
ical mineral under section 45X(c)(6) and
thus section 30D. These comments were
considered in the context of the section
45X proposed regulations. As explained
in the Explanation of Provisions to the
section 45X proposed regulations: “Some
stakeholders have questioned whether this
definition could be interpreted to refer to a
particular crystalline structure of carbon,
that is, 99.9 percent carbon in a graphitic
form. [. . .] Consistent with the general
intent of section 45X, proposed §1.45X-
4(b)(14) would clarify that the term ‘99.9
percent graphitic carbon by mass’ means
graphite that is 99.9 percent carbon by
mass.” The Treasury Department and the
IRS will continue to consider this issue
as part of finalizing of the section 45X
regulations. The form of graphite that is
an applicable critical mineral for the pur-
poses of section 30D will be the form that
is determined to be an applicable critical
mineral in the 45X final regulations.
Several commenters requested clar-
ity as to whether synthetic graphite is an
applicable critical mineral. Those com-
menters requested that the final regula-
tions explicitly state that both graphite
variations, synthetic and natural, qualify
as an applicable critical mineral. A sepa-
rate commenter suggested that, because
natural and synthetic graphite have
entirely different processing procedures,
synthetic graphite should not be catego-
rized as an applicable critical mineral.
These comments were also considered in
the context of the section 45X proposed
regulations. Proposed §1.45X-4(b)(14)
would provide that “[t]he term graphite
means natural or synthetic graphite that
is purified to a minimum purity of 99.9
percent graphitic carbon by mass.” The
Treasury Department and the IRS will
continue to consider this issue as part of
finalizing of the section 45X regulations.
The form of graphite that is an applicable
critical mineral for the purposes of section
30D will be the form that is determined
to be an applicable critical mineral in the
section 45X final regulations.
Several commenters requested clar-
ification on whether other critical min-
erals are subject to the Critical Minerals
Requirement and the FEOC Restriction.
One commenter requested that the final
regulations provide clarification with
respect to hydrofluoric acid (HF). HF may
be produced from fluorspar that is puri-
fied to a minimum purity of 97 percent
calcium fluoride by mass. In these cases,
the fluorspar is an applicable critical min-
eral (under section 45X(c)(6)(K)) and the
HF would be an associated constituent
material, both of which would be subject
to the Critical Minerals Requirement and
the FEOC Restriction. The commenter
noted that in other cases, HF may be made
with lower purity fluorspar or through
phosphate mining (without fluorspar).
The commenter requested clarification
that such HF is still subject to the Criti-
cal Minerals Requirement and the FEOC
Restriction. Similarly, another commenter
requested clarity as to whether nickel,
manganese, cobalt, and lithium that do not
meet the purity requirements of section
45X(c)(6) are subject to the Critical Min-
erals Requirement and the FEOC Restric-
tion. This commenter recommended that
such lower-purity minerals not be subject
to these rules.
One commenter recommended
expanding the definition of “applicable
critical mineral” to include other chemi-
cal forms of the critical minerals identi-
fied in section 45X(c)(6), such as nitrates,
hydroxides, oxides, oxide hydroxides,
carbonates, and chlorides. Another com-
menter stated that the critical minerals list
excludes important minerals, such as iron
and phosphorous, that are prevalent in
FEOC-made batteries, and that this exclu-
sion may introduce a loophole whereby
FEOC-made batteries using non-listed
critical minerals may be eligible for the
critical mineral portion of the 30D credit.
That commenter requested that the Trea-
sury Department and the IRS issue addi-
tional rules to address non-U.S. critical
minerals. Finally, one commenter noted
that many minerals that enter battery sup-
ply chains prior to attaining the purity
level listed in section 45X or becoming
an associated constituent material come
from FEOCs. That commenter expressed
support for extending FEOC-compliance
for critical minerals throughout produc-
tion, even if the mineral is not in a final
form listed in section 45X(c)(6) during
each step.
In response to these comments, the
Treasury Department and the IRS note
that under the plain language of sections
30D(e)(1) and 45X(c)(6), minerals other
than those specified in section 45X(c)
(6) are not applicable critical minerals,
and are therefore not subject to the Crit-
ical Minerals Requirement and the FEOC
Restriction. In addition, the rules of pro-
posed §§1.30D-6(c)(4)(ii)(A) and 1.30D-

May 28, 2024 1258 Bulletin No. 2024–22
6(c)(4)(ii)(C) provided additional clarity
regarding classification as an applicable
critical mineral in cases in which the form
of the mineral changes during the steps
of extraction, processing, or recycling.
The final regulations extend this clarifica-
tion to the Critical Minerals Requirement
by incorporating it into the definition of
“applicable critical mineral.”
The final regulations adopt the defi-
nition in proposed §§1.30D-3(a)(1),
1.30D-6(c)(1), 1.30D-6(c)(4)(ii)(A), and
1.30D-3(c)(4)(ii)(C), with the modifica-
tion described above, consolidate it, and
move it to §1.30D-2(b) with the modifi-
cation described previously. Specifically,
the final regulations, like the proposed
regulations, provide that “applicable
critical mineral” means an applica-
ble critical mineral defined in section
45X(c)(6). The final regulations clarify
that the requirements under §§1.30D-3
and 1.30D-6 with respect to an appli-
cable critical mineral take into account
each step of extraction, processing, or
recycling through the step in which such
mineral is processed or recycled into
an associated constituent material, even
if the mineral is not in a form listed in
section 45X(c)(6) at every step of pro-
duction. The final regulations further
clarify that an applicable critical mineral
is disregarded for purposes of the Criti-
cal Minerals Requirement and the FEOC
Restriction if it is fully consumed in
the production of the constituent mate-
rial or battery component and no longer
remains in any form in the battery.
In addition, the final regulations incor-
porate the special rule for recycling in pro-
posed §1.30D-6(c)(4)(ii)(A) into the defi-
nition of “recycling” in §1.30D-2(b). The
final regulations also provide an example
that illustrates when the determinations
under the Critical Minerals Requirement
and the FEOC Restriction take place with
respect to an applicable critical mineral.
2. Assembly
Proposed §§1.30D-3(c)(2) and 1.30D-
6(a)(2) defined “assembly,” with respect
to battery components, as the process of
combining battery components into bat-
tery cells and battery modules. The final
regulations adopt the definition of “assem-
bly” in proposed §§1.30D-3(c)(2) and
1.30D-6(a)(2), consolidate it into a single
provision, and move it to §1.30D-2(b).
One commenter stated that the defini-
tion of “assembly” could allow for abuse
under the Battery Components Require-
ment by allowing a North American man-
ufacturer, for example, to simply affix two
Chinese batteries together, which would
be considered assembly of a North Amer-
ican battery component. However, in this
situation, the incremental value, for pur-
poses of determining the total incremental
value of North American battery compo-
nents (that is, the numerator in the qual-
ifying battery component content that is
compared to the applicable percentages of
section 30D(e)(2)(B)), would only be the
value of the affixed batteries, less the value
of the batteries prior to assembly. Because
that incremental value would be minimal,
the potential for abuse as described by
the commenter would also be minimal.
Accordingly, the final regulations do not
adopt this comment.
3. Associated Constituent Materials
Proposed §1.30D-6(c)(4)(ii)(B) pro-
vided that in determining whether an
applicable critical mineral is FEOC-com-
pliant, a constituent material is associated
with an applicable critical mineral if the
applicable critical mineral has been pro-
cessed or recycled into a constituent mate-
rial, even if that processing or recycling
transformed the mineral into a form not
listed in section 45X(c)(6).
The Critical Minerals Requirement
under proposed §1.30D-3 incorporated
the same concept by providing that the
portion of an applicable critical mineral
that is a qualifying critical mineral must
be determined separately for each pro-
curement chain. Proposed §1.30D-3(c)
(14) defined “procurement chain” as a
common sequence of extraction, process-
ing, or recycling activities that occur in a
common set of locations with respect to
an applicable critical mineral, concluding
in the production of constituent materials.
These determinations necessarily
encompass steps in the procurement chain
in which the applicable critical mineral
is transformed into a form not listed in
section 45X(c)(6). Accordingly, the final
regulations add a definition of “associ-
ated constituent material” to §1.30D-2(b),
which provides that, with respect to an
applicable critical mineral, an “associ-
ated constituent material” is a constituent
material that has been processed or recy-
cled from such mineral into the constitu-
ent material with which it is associated,
even if that processing or recycling trans-
formed such mineral into a form not listed
in section 45X(c)(6).
4. Battery
Proposed §§1.30D-3(c)(3) and 1.30D-
6(a)(3) defined “battery,” for purposes of
a new clean vehicle, as a collection of one
or more battery modules, each of which
has two or more electrically configured
battery cells in series or parallel, to cre-
ate voltage or current. Under proposed
§§1.30D-3(c)(3) and 1.30D-6(a)(3), the
term “battery” did not include items such
as thermal management systems or other
parts of a battery cell or module that do
not directly contribute to the electro-
chemical storage of energy within the
battery, such as battery cell cases, cans, or
pouches. The final regulations adopt the
definition of “battery” in §§1.30D-3(c)(3)
and 1.30D-6(a)(3), consolidate it into a
single provision, and move the definition
to §1.30D-2(b).
The Treasury Department and the IRS
received comments both in support of and
in opposition to the proposed definition of
“battery.” Several commenters requested
a broader definition of “battery,” while
other commenters criticized the definition
of battery as too broad. Similarly, several
commenters disagreed with the definition
of “battery” and recommended that it be
defined as a complete battery pack. The
Explanation of Provisions to the April
Proposed Regulations noted that the pro-
posed definition of “battery” is consistent
with the language and purpose of section
30D because battery modules and cells are
the sources “from which the electric motor
of such vehicle draws electricity.” See
sections 30D(e)(1)(A) and (2)(A). Con-
sistent with this, items that do not directly
contribute to the electrochemical storage
of energy within the battery are not the
subject of the IRA’s incentives to shift to
more secure and resilient electric vehi-
cle battery supply chains. Such items are
generally low-value commodities that are
specific to the end-use of the energy stor-

Bulletin No. 2024–22 1259 May 28, 2024
age technology, rather than the process of
storing energy. The proposed definition of
“battery” is in keeping with the statutory
purpose of incentivizing the resiliency
and security of the highest-value and most
specialized portions of the battery supply
chain. In addition, the functional defini-
tion of “battery” in the proposed regula-
tions allows for technological changes, as
the definition will not be obsolete if bat-
tery pack structures change in the future,
but is also consistent with current industry
practice, as electrochemical batteries are
currently standard. Accordingly, the final
regulations do not adopt these comments.
In addition, one commenter requested
that the definition of “battery” exclude
thermal management systems and other
components that do not directly contrib-
ute to energy storage. Because the defi-
nition of “battery” already excludes such
systems and such other components, no
modification to the definition of “battery”
is required.
Finally, one commenter noted the
necessity of future conversations about
the definitions of “battery” and “bat-
tery component” to reflect technological
advances. The Treasury Department and
the IRS will continue to monitor technol-
ogy in this area in coordination with the
DOE. The Treasury Department and the
IRS welcome additional comments in the
future that discuss technological changes
with respect to electric vehicle batteries.
5. Battery Cell
Proposed §§1.30D-3(c)(4) and 1.30D-
6(a)(4) defined “battery cell” as a combi-
nation of battery components (other than
battery cells) capable of electrochemically
storing energy from which the electric
motor of a new clean vehicle draws elec-
tricity. This proposed definition of battery
cell encompassed the smallest combina-
tion of battery components necessary for
the function of energy storage. The final
regulations adopt the definition of “battery
cell” in proposed §§1.30D-3(c)(4) and
1.30D-6(a)(4), consolidate it into a single
provision, and move it to §1.30D-2(b).
A commenter requested that the guid-
ance align the definitions of “battery cell”
and “battery component” with those in
section 45X(c)(5). However, section 30D
does not adopt those definitions by refer-
ence. As noted in section III.A.4 of this
Summary of Comments and Explanation
of Revisions, items that do not directly
contribute to the electrochemical storage
of energy within the battery, which are
generally low-value commodities, are
not the subject of the IRA’s incentives to
shift to more secure and resilient electric
vehicle battery supply chains. For this
reason, the Treasury Department and the
IRS have determined that the section 30D
definitions should be limited to electro-
chemical energy storage batteries that that
are used in electric vehicles, and do not
need to encompass concepts that are perti-
nent to other forms of energy storage that
are included in the definitions in section
45X(c)(5) (for example, thermal batter-
ies). Accordingly, the final regulations do
not adopt this comment.
6. Battery Component
Proposed §§1.30D-3(c)(5) and 1.30D-
6(a)(6) defined “battery component” as
a component that forms part of a battery
and that is manufactured or assembled
from one or more components or constit-
uent materials that are combined through
industrial, chemical, and physical assem-
bly steps. Battery components include,
but are not limited to, a cathode elec-
trode, anode electrode, solid metal elec-
trode, separator, liquid electrolyte, solid
state electrolyte, battery cell, and battery
module. Constituent materials are not
considered a type of battery component,
although constituent materials could be
manufactured or assembled into battery
components. Some battery components
could be made entirely of inputs that do
not contain constituent materials. Bat-
tery components include any piece of the
assembled battery cell that contributes to
electrochemical energy storage.
The Treasury Department and the IRS
received a number of comments regard-
ing the definition of “battery component.”
Several commenters were supportive of
the definition. The proposed definition of
“battery component” included a non-ex-
haustive list of specific components, and
many commenters proposed additions to
the list. One commenter suggested that the
list specifically include cathode and anode
foil. Other commenters requested clarity
with respect to lead tabs (for battery cells),
metal components (for battery modules),
and cap assemblies (for the manufacture
of canister battery cells). Other items
suggested for inclusion were separator
coatings, binders, electrolyte solvents and
electrolyte salts, current collectors, cell
contacting layers, voltage sense harness-
ing, and battery management systems.
Another commenter noted that the inclu-
sion of “but not be limited to” language
creates uncertainty for automakers and
instead asked for a full list of compo-
nents. In response, the final regulations
add a new definition of “battery materi-
als” (described in section III.A.7 of this
Summary of Comments and Explanation
of Revisions) to §1.30D-2(b). In addition,
the final regulations clarify that battery
materials without applicable critical min-
erals are not battery components, as they
are not manufactured or assembled. The
final regulations do not provide a com-
plete list of battery components because
electric vehicle battery components may
vary depending on the battery chemistry,
especially as battery technology continues
to evolve. The illustrative list of battery
components in the final regulation allows
for future innovation.
Several commenters raised concerns
regarding the limitation of battery com-
ponents to items that contribute to elec-
trochemical energy storage. A commenter
supported the limitation as important to
both the workability of and intent behind
the Battery Components Requirement.
On the other hand, another commenter
requested that the final regulations expand
the definition of “battery component” to
include additional enabling technologies,
such as thermal management, cooling, and
housing and enclosure components. The
commenter, mentioned previously, that
requested clarity with respect to lead tabs
and metal components stated that ambigu-
ity with respect to the phrase “electrochem-
ical storage components” made it difficult
to determine whether these items were
battery components. Similarly, comment-
ers suggested that, under the language of
section 30D, battery components should
include thermal barriers. As noted previ-
ously, the proposed definition of “battery,”
which informs the definition of “battery
component,” is consistent with the statute
because battery modules and cells are the
sources “from which the electric motor of

May 28, 2024 1260 Bulletin No. 2024–22
such vehicle draws electricity.” Section
30D(e)(1)(A) and (2)(A). In addition, this
definition is consistent with the purpose of
section 30D to provide incentives to move
toward more secure and resilient electric
vehicle battery inputs. Inputs that do not
directly contribute to the electrochemical
processes necessary for energy storage
(for example, thermal management sys-
tems, battery management systems, hous-
ing/enclosure components) are generally
lower-value and specific to the end use of
the battery, rather than the process of stor-
ing energy. The same reasoning applies to
battery components. As noted by the Joint
Committee on Taxation, the battery com-
ponents requirement in section 30D(e)(2)
(A) is “intended to incentivize the manu-
facturing or assembly of high-value bat-
tery components, such as battery cells, in
North America.”
4
Accordingly, because
the proposed definition is consistent with
the statutory text and purpose, the final
regulations do not adopt these comments.
Finally, multiple commenters raised
questions and provided recommendations
relating to separators, many of which
relate to the determination under the Bat-
tery Components Requirement (discussed
in section III.B.2 of this Summary of
Comments and Explanation of Revisions).
One commenter requested clarification as
to the incremental value of a coated sep-
arator, and recommended that the incre-
mental value be determined by subtracting
the value of an uncoated separator (a lith-
ium-ion battery separator) from the value
of the coated separator (a ceramic coated
separator). Another commenter, noting
that “substantially all” in the definition
of “North American Battery Component”
was vague, requested that the final regula-
tions state that a separator coated in North
America is a North American Battery
Component (regardless of where the pre-
coated separator was manufactured). This
commenter stated that up to 60 percent of
the value added by the separator comes
from the coating process. In contrast,
another commenter requested that the
final regulations clarify that coating a sep-
arator is not manufacturing or assembly,
to ensure that a separator coated in North
America is not considered a North Amer-
ican Battery Component if the pre-coated
separator was manufactured outside of
North America. A different commenter
advocated against the inclusion of base
film and coating materials used to make
such separator in the definition of “battery
component” for purposes of the Battery
Components Requirement and the FEOC
Restriction. In addition, one commenter
requested that the bare film and binders
incorporated into a ceramic-coated sep-
arator be classified as battery sub-com-
ponents and noted that these items should
qualify under either the Critical Minerals
Requirement or the Battery Components
Requirement if manufactured in North
America or a country with which the
United States has a free trade agreement
in effect. This commenter also made sug-
gestions with respect to various other gov-
ernment rules that may apply to coated
separators, which are outside the scope of
these final regulations.
In response to these comments, the
Treasury Department and the IRS note
that a coated separator is a battery compo-
nent. In general, the base film and coating
are battery materials, not battery compo-
nents, because they are processed rather
than manufactured or assembled. If those
battery materials contain applicable crit-
ical minerals, those battery materials are
constituent materials. The final regula-
tions clarify this in the definition of “bat-
tery component” and the new definition of
“battery materials.”
Finally, several commenters discussed
the relationship between the Battery
Components Requirement and the FEOC
Restriction. One commenter encouraged
the Treasury Department and the IRS to
use the same definition of “battery compo-
nent” for purposes of the Battery Compo-
nents Requirement and the FEOC Restric-
tion. In contrast, another commenter
suggested that the final regulations adopt
a broader definition of “battery compo-
nent” for purposes of the FEOC Restric-
tion that includes components otherwise
included in the definition of “constitu-
ent material” for purposes of the Critical
Minerals Requirements. As noted in the
Explanation of Provisions to the Decem-
ber Proposed Regulations, the Treasury
Department and the IRS intend that terms
relevant to both the Critical Minerals and
Battery Components Requirement and the
FEOC Restriction be interpreted consis-
tently. Consistent with that, the final reg-
ulations include one general definition of
“battery component” for purposes of sec-
tion 30D, and do not adopt the comment
suggesting a broader definition for pur-
poses of the FEOC Restriction.
The final regulations, in §1.30D-2(b),
adopt a definition of “battery compo-
nent” that clarifies the treatment of sepa-
rators and incorporates the new definition
of “battery materials.” The definition is
modified to improve clarity regarding the
relationship between battery components,
constituent materials, and battery materi-
als.
7. Battery Materials
To further clarify the line between bat-
tery components and constituent materi-
als, the final regulations add a definition
of “battery materials” to §1.30D-2(b).
The final regulations define “battery
materials” as direct and indirect inputs
to battery components that are produced
through processing, rather than manufac-
turing or assembly. Battery materials are
not considered a type of battery compo-
nent, although battery materials may be
manufactured or assembled into battery
components. The three categories of bat-
tery materials are applicable critical min-
erals, constituent materials, and battery
materials without applicable critical min-
erals. Examples of battery materials that
may or may not contain applicable critical
minerals include a separator base film (if
not manufactured or assembled) and sep-
arator coating. Examples of battery mate-
rials without applicable critical minerals
include conductive additives, copper foils
prior to graphite deposition, and electro-
lyte solvents.
8. Clean Vehicle Battery
The final regulations add a definition
of “clean vehicle battery” to §1.30D-2(b).
Consistent with section 30D(d)(1)(F)
and 30D(e), the final regulations define
4
Joint Committee on Taxation, Joint Committee on Taxation, General Explanation of Tax Legislation Enacted in the 117 Congress (JCS 1-23), December 2023, at 252, n.1070.

Bulletin No. 2024–22 1261 May 28, 2024
“clean vehicle battery,” with respect to a
new clean vehicle, means the battery from
which the electric motor of the vehicle
draws electricity to propel such vehicle.
9. Compliant-battery Ledger
Proposed §1.30D-6(a)(7) defined
“compliant-battery ledger,” for a quali-
fied manufacturer for a calendar year, as
a ledger that tracks the number of avail-
able FEOC-compliant batteries for such
calendar year. Proposed §1.30D-6(d) set
forth rules applicable to compliant-battery
ledgers. The Treasury Department and
the IRS received several comments about
the rules for establishing, updating, and
reconciling the compliant-battery ledger.
These comments are included as part of
the discussion of proposed §1.30D-6(d) in
section III.D.3 of this Summary of Com-
ments and Explanation of Revisions.
The final regulations adopt the pro-
posed definition and move it to §1.30D-
2(b).
10. Constituent Materials
Proposed §§1.30D-3(c)(6) and 1.30D-
6(a)(8) defined “constituent materials” as
materials that contain applicable critical
minerals and are employed directly in the
manufacturing of battery components.
Constituent materials could include, but
are not limited to, powders of cathode
active materials, powders of anode active
materials, foils, metals for solid elec-
trodes, binders, electrolyte salts, and elec-
trolyte additives, as required for a battery
cell. As explained in the Explanation of
Provisions to the April Proposed Regula-
tions, the definition of “constituent mate-
rials” describes the materials that distin-
guish the steps of extraction, processing,
and recycling of critical minerals from the
subsequent steps of manufacturing and
assembly of battery components. Constit-
uent materials are the final products rele-
vant for calculating the value of the appli-
cable critical minerals in the battery.
The Treasury Department and the IRS
received multiple comments with respect
to the definition of “constituent materi-
als.” Several commenters expressed sup-
port for the proposed definition. However,
other commenters criticized the definition
as not supported by the statute; as at odds
with section 45X, which includes “elec-
trode active materials” as qualifying bat-
tery components; and as an inappropriate
reclassification of items that should be
battery components, and thus subject to
the Battery Components Requirement.
One commenter suggested that constituent
materials be included within the defini-
tion of “battery component” or otherwise
phased in to allow for additional time to
relocate production facilities to North
America. Another commenter indicated
that the definition of “constituent materi-
als” could be exploited to exclude critical
minerals.
In response to these comments, the
Treasury Department and the IRS note
that although section 30D does not define
“battery component,” it consistently refers
to components as “manufactured or assem-
bled,” and it consistently refers to “appli-
cable critical minerals” as “extracted,
processed, or recycled.” To avoid a gap in
the supply chain between applicable crit-
ical minerals and battery components, the
proposed regulations introduced the con-
cept of constituent materials to make clear
that materials downstream of applicable
critical minerals, but still processed rather
than manufactured or assembled, belong
in the analysis of a battery’s applicable
critical minerals. Section 30D looks to a
material’s production steps to determine
its status as an applicable critical mineral
or a battery component. The constituent
materials concept does not alter how the
statute works; rather, it clarifies how the
statute applies to certain materials.
One commenter suggested modifying
the definition of “constituent materials”
to include domestic alternatives that serve
the same purpose as constituent materials
but do not contain applicable critical min-
erals. The final regulations do not adopt
this comment because the commenter’s
proposal would be at odds with the Crit-
ical Minerals Requirement and the FEOC
Restriction (as applicable to applicable
critical minerals).
Other commenters raised questions
with respect to whether specific materials
are constituent materials. One commenter
asked for clarification as to whether foils,
such as a copper foil that does not con-
tain any applicable critical minerals, are
constituent materials. Another commenter
asked for clarity with respect to polyvi-
nylidene fluoride (PVDF). Noting that
PVDF made from fluorine (in the form of
an applicable critical mineral) would be a
constituent material, the commenter asked
for clarification about the classification of
PVDF that is not made from an applicable
critical mineral, such as PVDF sourced
from phosphate rock. The final regula-
tions clarify that battery materials may not
contain applicable critical minerals. Fur-
ther, the Treasury Department and the IRS
note that the materials referenced by these
commenters (foils and PVDF) would both
be considered battery materials without
applicable critical minerals.
One commenter sought clarification of
whether lithium hexafluorophosphate is
considered an electrolyte salt for purposes
of the definition of constituent materials.
If an applicable critical mineral in a form
specified in section 45X(c)(6) is used to
produce lithium hexafluorophosphate, and
this material is integrated into a battery
component, the material would be consid-
ered a constituent material.
A separate commenter requested that
the final regulations clarify that car-
boxymethylcellulose (CMC), made from
wood pulp or linter pulp, is not a constit-
uent material. The commenter notes that
CMC does not contain applicable critical
minerals. The Treasury Department and
the IRS note that, while CMC is used in
the manufacture of a battery component as
a binder or coating for the production of
anode electrodes by deposition of anode
active material onto copper foil, CMC
itself does not contain an applicable crit-
ical mineral, and therefore would not be
considered a constituent material.
Finally, one commenter requested
clarification with respect to powders of
cathode active materials (CAM), which
is listed as a constituent material. The
commenter noted that the list does not
expressly include precursor materials used
for making CAM or other intermediate
materials incorporating the critical miner-
als that are used to produce the CAM. The
commenter specifically recommended
adding these items to the list and includ-
ing references to the relevant applicable
critical minerals by revising the definition
to include powders of precursor cathode
active materials and any other intermedi-
ate products incorporating critical miner-
als such as manganese, nickel, or cobalt,

May 28, 2024 1262 Bulletin No. 2024–22
powders of cathode active materials. The
final regulations provide, in the defini-
tion of “applicable critical mineral,” that
determinations under the Critical Miner-
als Requirement and the FEOC Restric-
tion with respect to an applicable criti-
cal mineral take into account each step
of extraction, processing, or recycling
through the step in which such mineral is
processed or recycled into a constituent
material. Thus, the final regulations clar-
ify that these precursor or other intermedi-
ate materials are relevant for both the Crit-
ical Minerals Requirement and the FEOC
Restriction.
The final regulations adopt the defini-
tion of “constituent materials” in proposed
§§1.30D-3(a)(8) and 1.30D-6(c)(6), con-
solidate it into a single provision, and
move it to §1.30D-2(b). In addition, the
final regulations clarify that battery mate-
rials without applicable critical minerals
are not constituent materials.
12. Country with which the United States
has a Free Trade Agreement in effect
Proposed §1.30D-3(c)(7) defined the
term “country with which the United States
has a free trade agreement in effect” and
listed the countries with which the United
States has free trade agreements in effect.
As noted in the Explanation of Provisions
to the April Proposed Regulations, the
term free trade agreement is not defined in
the IRA or in the Code. Proposed §1.30D-
3(c)(7)(i) set forth criteria for the identifi-
cation of a country with which the United
States has a free trade agreement in effect,
including whether an agreement between
the United States and another country, as
to the critical minerals contained in elec-
tric vehicle batteries or more generally,
and in the context of the overall commer-
cial and economic relationship between
that country and the United States: (A)
reduces or eliminates trade barriers on a
preferential basis, (B) commits the par-
ties to refrain from imposing new trade
barriers, (C) establishes high-standard
disciplines in key areas affecting trade
(such as core labor and environmental
protections), and/or (D) reduces or elim-
inates restrictions on exports or commits
the parties to refrain from imposing such
restrictions on exports.
Proposed §1.30D-3(c)(7)(ii) identified
twenty countries with which the United
States has comprehensive free trade
agreements (that is, agreements covering
substantially all trade in goods and ser-
vices between the parties, including trade
in critical minerals). In addition, the Trea-
sury Department and the IRS proposed to
include additional countries identified by
the Secretary, after consideration of the
listed criteria, and identified Japan as an
additional country. On March 28, 2023,
the United States and Japan concluded
a Critical Minerals Agreement (CMA),
which contained robust obligations to help
ensure free trade in critical minerals.
5

Proposed §1.30D-3(c)(7)(iii) pro-
vided that the list of identified countries
in paragraph (c)(7)(ii) may be revised and
updated through appropriate guidance
published in the Federal Register or in the
Internal Revenue Bulletin (see §601.601
of the Statement of Procedural Rules (26
CFR part 601)).
The final regulations adopt this defini-
tion and move it to §1.30D-2(b). At this
time, the Treasury Department and the
IRS have not identified any additions to
the list of identified countries. The final
regulations continue to include Japan on
the list of countries with which the United
States has free trade agreements in effect.
After consulting with the United States
Trade Representative in applying the rel-
evant factors for identifying free trade
agreements, the Treasury Department and
the IRS have concluded that Japan is a
country with which the United States has
a free trade agreement in effect. The Trea-
sury Department and the IRS specifically
sought comments on the proposed criteria
for identifying countries with which the
United States has free trade agreements
in effect, other potential approaches for
identifying those countries, and the list of
countries set forth in proposed §1.30D-
3(c)(7)(ii).
The Treasury Department and the IRS
received several comments with respect
to this definition. One comment requested
guidance identifying at what stage a trade
agreement is considered in effect, not-
ing the signature date of an agreement is
frequently different from the trade agree-
ment’s implementation date. The com-
menter requested that the completion date
be considered the date that a trade agree-
ment is in effect. As an initial matter, inter-
national agreements to which the United
States is a party, including those referred
to in the §1.30D-2(b) definition of “coun-
try with which the United States has a free
trade agreement in effect,” ordinarily iden-
tify the date on which they enter into force
and therefore are “in effect,” as that term
is used in section 30D. Consistent with the
approach described in the proposed rules
and adopted in the final rules, the Treasury
Department and the IRS will also “make
any necessary amendments to the list . . .
including adding any additional countries
as any new qualifying international agree-
ments enter into force and the Secretary
determines that the [applicable] factors
have been met.” The Treasury Department
and the IRS have determined that the
assessment of whether an agreement is in
effect is something that the Secretary will
evaluate in the context of individual agree-
ments that may be considered in determin-
ing whether to add individual countries to
the list of countries with which the United
States has free trade agreements in effect.
One commenter requested defining
“country” to include geographical areas
that are of an international nature and do
not belong to any one country, such as
international waters. The ordinary mean-
ing of “country” does not include areas
beyond national jurisdiction. Therefore,
the final regulations do not adopt this
comment.
Several comments suggested that the
proposed definition of “free trade agree-
ment” expands the regulatory regime and
undercuts Congressional intent. Relatedly,
a comment specifically criticized the
inclusion of Japan on the list on the basis
of the CMA. Other commenters supported
the inclusion of Japan on the basis of the
CMA. Another commenter suggested that
the proposed regulations impermissibly
expand the Secretary’s authority to define
5
Agreement Between the Government of the United States of America and the Government of Japan on Strengthening Critical Minerals Supply Chains, concluded March 28, 2023, https://
ustr.gov/ sites/ default/ files/ 2023-03/ US%20Japan%20Critical%20Minerals%20Agreement%202023%2003%2028.pdf

Bulletin No. 2024–22 1263 May 28, 2024
“free trade agreement,” and that the regu-
latory definition departs from its accepted
meaning. Several commenters suggested
defining free trade agreements to include
arrangements, including plurilateral
agreements, in which the United States
and a foreign economy agree to at least
some strategic and/or economic partner-
ships, including government procurement,
even if the agreement was not labeled a
free trade agreement.
As noted earlier in this discussion and
in the Explanation of Provisions to the
April Proposed Regulations, the term “free
trade agreement” is not defined in the IRA
or in the Code, and the definition in the
proposed regulations is consistent with the
statute and its purpose, as reflected in the
term’s ordinary meaning, use, and context
in section 30D and in the broader IRA.
As also noted in the Explanation of Pro-
visions to the April Proposed Regulations,
the purpose of the IRA’s amendments to
section 30D is to expand the incentives for
taxpayers to purchase new clean vehicles
and for vehicle manufacturers to increase
their reliance on supply chains in the
United States and in countries with which
the United States has reliable and trusted
economic relationships, which is essential
for our national security, our economic
security, and our technological leader-
ship. The proposed definition of “country
with which the United States has a free
trade agreement in effect” is consistent
with these statutory purposes.. In partic-
ular, the criteria identified in the proposed
definition that must be met for an instru-
ment to be determined to be a free trade
agreement include whether an agreement
between the United States and another
country includes commitments related
to reducing or eliminating trade barriers
on a preferential basis, refraining from
imposing new trade barriers, establishing
high-standard disciplines in trade-related
areas, and reducing or eliminating restric-
tions on exports or committing the parties
to refrain from imposing such restrictions,
all in the context of the overall commer-
cial and economic relationship between
the country in question and the United
States. Based on the criteria above, Japan
was identified as a country with which
the United States has a free trade agree-
ment in effect. In particular, the United
States-Japan CMA was identified as a
free trade agreement under these criteria
because it includes robust obligations,
such as a commitment to refrain from
imposing duties on exports of critical
minerals that are currently essential to the
electric vehicle battery supply chain, and
a commitment for the United States and
Japan to confer on best practices regard-
ing review of investments in the critical
minerals sector for purposes of assisting a
determination of the effect of such invest-
ments on national security. The CMA also
includes detailed terms related to the rela-
tionships of labor and environmental laws
to trade in critical minerals and coopera-
tion on non-market policies and practices
of non-parties affecting trade in critical
minerals. The CMA was concluded in the
context of an earlier trade agreement the
United States concluded with Japan in
2019, a related 2019 agreement on digital
trade, and the U.S.-Japan Partnership on
Trade announced in November 2021.
Several commenters addressed issues
relating to labor standards, environmental
standards, economic and national secu-
rity, transparency, and enforceability.
One commenter requested that the United
States Geological Survey be consulted
as to the environmental standards and
compliance and enforcement histories of
specified non-domestic sources. Another
commenter encouraged the Treasury
Department and the IRS to collaborate
with the Department of State to leverage
the Minerals Security Partnership (MSP)
to secure supply chains needed to scale
domestic battery production while estab-
lishing higher labor standards, greater
transparency, improved environmental
practices, and greater value-added bene-
fits for communities located in countries
with significant mineral endowments. The
Treasury Department and the IRS appre-
ciate these concerns and note that they
are appropriately reflected in the criteria
identified in the proposed regulations,
specifically as high-standard disciplines
in key areas affecting trade. The Treasury
Department and the IRS will consult with
appropriate agencies across the Federal
government in applying the listed criteria
in the future.
Relatedly, several commenters raised
concerns about whether countries with
which the United States does not have
free trade agreements in effect could laun-
der applicable critical minerals through
procurement chains involving countries
with which the United States has free
trade agreements in effect. The Treasury
Department and the IRS have determined
that the upfront review process in §1.30D-
3(d) of the final regulations (described in
section III.B.3 of this Summary of Com-
ments and Explanation of Revisions),
which involves due diligence and requires
documentation of critical mineral supply
chains, will promote accurate tracing of
the full critical mineral supply chain.
Another commenter suggested includ-
ing a broad set of critical minerals in any
future critical minerals agreement. The
commenter noted that limiting future crit-
ical mineral agreements to a limited sub-
set of applicable critical minerals has the
potential to limit innovation. In response
to this comment, the Treasury Department
and the IRS note that the determination
under the Critical Minerals Requirement
with respect to “any country with which
the United States has a free trade agree-
ment in effect,” would not be limited in
the case of critical minerals agreements
by the scope of minerals covered by such
critical minerals agreement. Once the Sec-
retary determines that a country qualifies
as a country with which the United States
has a free trade agreement in effect, any
applicable critical minerals within the
meaning of section 45X(c)(6) extracted
or processed in that country are eligible.
Finally, several commenters requested
that additional countries be added to the
list, including Argentina, the Philippines,
members of the European Union, and the
United Kingdom. At this time, the Trea-
sury Department and the IRS have not
identified agreements in effect with the
suggested countries within the meaning
of section 30D. The Treasury Depart-
ment and the IRS will continue to work
with the United States Trade Representa-
tive and across the Federal government to
apply the listed criteria to determine if it
is appropriate to list additional countries.
13. Extraction
Proposed §§1.30D-3(c)(8) and 1.30D-
6(a)(9) defined “extraction” as the activ-
ities performed to extract or harvest min-
erals or natural resources from the ground
or a body of water, including, but not lim-

May 28, 2024 1264 Bulletin No. 2024–22
ited to, by operating equipment to extract
minerals or natural resources from mines
and wells, or to extract or harvest min-
erals or natural resources from the waste
or residue of prior extraction. Under the
proposed definition, extraction concludes
when activities are performed to convert
raw mined or harvested products or raw
well effluent to substances that can be
readily transported or stored for direct
use in applicable critical mineral process-
ing. Extraction includes the beneficiation
or other physical processes that allow
the extracted materials, including ores,
clays, and brines, to become transport-
able. Extraction also includes the physical
processes involved in refining, but not the
chemical and thermal processes involved
in refining.
Several commenters requested clarity
on the line between extraction and pro-
cessing. Section III.A.22 of the Summary
of Comments and Explanation of Revi-
sions addresses these comments.
One commenter suggested that the
definition of “extraction” be expanded to
include critical minerals not physically
taken from the ground, citing innova-
tions in producing graphite from biomass
that no longer require physical ground
extraction. The proposed definition of
“extraction” includes the extraction of
minerals or natural resources from the
waste or residue of prior extraction. There-
fore, it is unnecessary to modify the defi-
nition of “extraction” in the manner the
commenter suggests. However, the final
regulations clarify that extraction also
includes crude oil extraction to the extent
processes applied to that crude oil yield
an applicable critical mineral as a byprod-
uct. The final regulations also clarify that
extraction does not include activities that
begin with a recyclable commodity (as
such activities themselves constitute recy-
cling).
The final regulations adopt the defi-
nition of “extraction” in the proposed
regulations, consolidate it into a single
provision with the clarification described
previously, and move it to §1.30D-2(b).
14. Final Assembly
Proposed §1.30D-2(b) provided that,
consistent with section 30D(d)(5), “final
assembly” means the process by which a
manufacturer produces a new clean vehi-
cle at, or through the use of, a plant, fac-
tory, or other place from which the vehi-
cle is delivered to a dealer or importer
with all component parts necessary for
the mechanical operation of the vehicle
included with the vehicle, whether or
not the component parts are permanently
installed in or on the vehicle. To estab-
lish where final assembly of a new clean
vehicle occurred, the proposed regulations
provided that a taxpayer could rely on the
following information: (1) the vehicle’s
plant of manufacture as reported in the
VIN pursuant to 49 CFR 565; or (2) the
final assembly point reported on the label
affixed to the vehicle as described in 49
CFR 583.5(a)(3). The final regulations
adopt the proposed definition of “final
assembly” without change.
The proposed regulations provided
two different methods for determining
whether a vehicle meets the North Ameri-
can final assembly requirement, either via
the VIN or the vehicle label, to ensure that
this information was available and acces-
sible for taxpayers. For nearly all vehicles,
both methods will provide the same final
assembly location. The vehicle’s plant of
manufacture as reported in the VIN means
the plant where the manufacturer affixes
the VIN. See 49 CFR 565.12. The plant of
manufacture is reported in the VIN pur-
suant to 49 CFR 565.15(d)(2). The DOE,
Alternative Fuels Data Center (AFDC),
and the Department of Transportation,
National Highway Traffic Safety Admin-
istration (NHSTA), each provide a VIN
decoder to the public, which can be used
to identify a vehicle’s plant of manufac-
ture. AFDC, VIN Decoder, https://afdc.
energy.gov/laws/electric-vehicles-for-tax-
credit; NHTSA, VIN Decoder, https://
www.nhtsa.gov/vin-decoder. Labeling
requirements in 49 CFR 583.5 require the
final assembly point to be reported on the
label affixed to a passenger motor vehi-
cle as defined in 49 U.S.C. § 32304(11)
(which limits such vehicles to those with
GVWR of 8,500 pounds or less). Final
assembly point means the plant, factory,
or other place, which is a building or series
of buildings in close proximity, where a
new passenger motor vehicle is produced
or assembled from passenger motor vehi-
cle equipment and from which such vehi-
cle is delivered to a dealer or importer in
such a condition that all component parts
necessary to the mechanical operation of
such automobile are included with such
vehicle, whether or not such component
parts are permanently installed in or on
such vehicle. For multi-stage vehicles,
the labeling requirements provide that
the final assembly point is the location
where the first stage vehicle is assembled.
49 CFR 583.4(b)(5). Multi-stage vehicles
are vehicles manufactured in two or more
stages by which an incomplete vehicle
becomes a completed vehicle and may
involve multiple manufacturers. See 49
CFR 567.3 for definitions of “incomplete
vehicle” and “completed vehicle.”
A commenter stated that the proposed
rule would allow taxpayers to use the
vehicle’s plant of manufacture reported
on the VIN, rather than the final assem-
bly point, for multi-stage vehicles. How-
ever, existing vehicle labeling require-
ments in 49 CFR part 583 apply to both
single-stage and multi-stage vehicles with
GVWR of 8,500 pounds or less. There-
fore, such requirements provide a final
assembly point for both types of vehicles.
The proposed regulations provided flexi-
bility to taxpayers in determining whether
the section 30D credit final assembly
requirement is met by allowing taxpayers
to look to either the plant of manufacture
identified in the VIN or the vehicle label
final assembly point. In the limited situa-
tions in which the VIN and vehicle label
may provide different final assembly loca-
tions, the proposed regulations allowed
taxpayers to choose the standard that is
more favorable to them. Moreover, the
VIN and vehicle labels will diverge only
in certain limited situations with respect
to a multi-stage vehicle, and most multi-
stage vehicles have a GVWR of more
than 8,500 pounds, and are, therefore, not
subject to the part 583 vehicle labeling
requirements. Furthermore, it is important
to leverage existing standards that pro-
vide accessible information to taxpayers,
and such information is more accessible if
taxpayers have multiple ways to obtain it.
Accordingly, the final regulations do not
adopt this comment.
Another commenter requested that
the final regulations define “final assem-
bly” more broadly, to include assembly of
body panels, painting, chassis assembly,
trim installation, and other assembly and

Bulletin No. 2024–22 1265 May 28, 2024
fabrication processes that are currently
found in established final assembly plants,
to maximize the incentive for produc-
tion in the United States. Section 30D(d)
(5) and the proposed definition of “final
assembly” look to the plant, factory, or
other place at which all component parts
necessary for the mechanical operation of
the vehicle are included with the vehicle.
Consistent with the commenter’s sugges-
tion, this is generally the location where
the chassis of the vehicle is assembled,
because at that point the vehicle may be
mechanically operable. In addition, the
two reliance standards described in the
proposed regulations, the vehicle’s plant
of manufacture as reported in the VIN,
and the final assembly point reported on
the vehicle label, generally also look to the
location where the chassis of the vehicle is
assembled. The other processes suggested
by the commenter (body panel assembly,
painting, and trim installation) do not
affect mechanical operation of the vehi-
cle and therefore are inconsistent with the
definition of “final assembly” for purposes
of 30D. Moreover, the VIN and labeling
standards also would not consider such
processes in determining the vehicle’s
plant of manufacture or final assembly
point. To provide accessible information
to taxpayers and to create an adminis-
trable rule, especially because the final
assembly rule was immediately effective
upon passage of the IRA,
6
the Treasury
Department and the IRS determined it was
necessary to leverage existing reporting of
final assembly rather than create an alter-
native definition that relies on information
that is not currently available to the pub-
lic. The Treasury Department and the IRS
consulted with the Department of Trans-
portation in developing the proposed and
final regulations regarding final assembly.
Because the proposed definition of “final
assembly” is consistent with the statutory
definition and provides an administrable
rule, the final regulations do not adopt this
comment with respect to processes other
than chassis assembly.
Another commenter stated that entities
already in the process of constructing pro-
duction facilities should not be held at a
disadvantage given the economic oppor-
tunity of creating additional domestic
jobs. The North American final assembly
requirement in section 30D(d)(1)(G) is
prescribed by statute, and the IRA pro-
vided an immediately applicable effective
date for this provision (August 17, 2022).
Accordingly, the final regulations do not
adopt this comment.
15. Foreign Entity of Concern
Proposed §1.30D-6(a)(10), consistent
with section 30D(d)(7), defined “foreign
entity of concern” to have the same mean-
ing as in section 40207(a)(5) of the Infra-
structure Investment and Jobs Act and
guidance promulgated thereunder by the
DOE. The final regulations adopt the pro-
posed definition and move it to §1.30D-
2(b).
The definition of “foreign entity of
concern” under section 40207(a)(5) of
the Infrastructure Investment and Jobs
Act is under the jurisdiction of the DOE.
On December 1, 2023, contemporaneous
with the issuance of the December Pro-
posed Regulations, the DOE issued pro-
posed interpretative guidance relating to
the definition. 88 FR 84082 (published
December 4, 2023). A number of com-
menters to the December Proposed Regu-
lations made requests or suggestions with
respect to the definition. These comments
are outside of the scope of these regula-
tions, and are not further addressed in
this Summary of Comments and Expla-
nation of Revisions.
Similarly, several commenters
requested more detailed thresholds and
processes for determining the involvement
of FEOC entities based on entity owner-
ship, control of, and/or acting jurisdiction.
The determination of whether an entity is
owned by, controlled by, or subject to the
jurisdiction of a FEOC is within the juris-
diction of the DOE and its interpretive
guidance. Accordingly, the comments are
outside of the scope of these final regula-
tions. One commenter also requested that
the final regulations address the potential
for arbitrage by artificially increasing the
value of a critical mineral or battery com-
ponent not based in or under the control of
a FEOC. Because the FEOC Restriction is
not based on value of materials, the final
regulations do not adopt this comment.
16. FEOC-compliant
Proposed §1.30D-6(a)(11), adopted
and moved to §1.30D-2(b) of the final
regulations, defined “FEOC-compliant”
to mean in compliance with the applicable
excluded entity requirement under section
30D(d)(7). The definition provided spe-
cific rules with respect to a clean vehicle
battery, a battery component (other than a
battery cell), a battery cell, and an appli-
cable critical mineral. A number of com-
menters raised questions with respect to
the due diligence required to determine
if an item is FEOC-compliant or com-
mented on the FEOC Restriction. These
comments are addressed in section III.D
of this Summary of Comments and Expla-
nation of Revisions.
17. Manufacturer
Proposed §1.30D-2(k) provided, con-
sistent with section 30D(d)(3), that “man-
ufacturer” means any manufacturer within
the meaning of the regulations prescribed
by the EPA for purposes of the administra-
tion of title II of the Clean Air Act (CAA)
(42 U.S.C. 7521 et seq.) and as defined in
42 U.S.C. 7550(1).
Under 42 U.S.C. 7550(1) and 40 CFR
1068.30 under the CAA regulations, mul-
tiple parties may be a manufacturer with
respect to a vehicle. To address this situ-
ation, the proposed definition also pro-
vided that, if multiple manufacturers are
involved in the production of a vehicle, the
requirements provided in section 30D(d)
(3), which must be met for a vehicle to
qualify for the section 30D, 45W and 25E
credits, must be met by the manufacturer
who satisfies the reporting requirements
of the greenhouse gas emissions standards
(CAA emissions reporting requirements)
set by the EPA under the CAA for the sub-
ject vehicle. The purpose of the proposed
multiple manufacturer rule was to provide
a clear rule for OEMs and other parties
that may be considered a manufacturer
under the CAA regulations.
One commenter suggested that the
final regulations modify the definition of
“manufacturer” to include upstream mem-
bers of the critical mineral supply chain,
including cell manufacturers, cathode
6
The final assembly requirement amendments made to section 30D in the IRA were applicable to vehicles sold after the date of enactment of the IRA. Pub. L. 117-169 §13401(k)(2).

May 28, 2024 1266 Bulletin No. 2024–22
manufacturers, and anode manufacturers,
in addition to the OEMs. Because the pro-
posed regulations define a manufacturer
by referring to the CAA regulations, if an
upstream manufacturer is covered by the
CAA regulations, that party will be a man-
ufacturer under section 30D. However,
if the upstream manufacturer is not cov-
ered by the CAA regulations, the statute
would not include such manufacturers in
the definition of “manufacturer.” Accord-
ingly, the final regulations do not adopt
this comment.
Another commenter requested that the
multiple manufacturer rule be modified to
include upfitters as manufacturers. Upfit-
ters purchase new internal combustion
engine (ICE) motor vehicles from manu-
facturers and then modify them into clean
vehicles prior to the vehicle being placed
in service by the ultimate purchaser.
Because the ICE vehicle manufacturer
is subject to the CAA emissions report-
ing requirements, neither the upfitter nor
the ICE vehicle manufacturer would be
able to meet the requirements of section
30D(d)(1)(C) and (3) under the multiple
manufacturer rule in the proposed regu-
lations. As a result, the vehicles modified
by the upfitter would be ineligible for the
section 25E, 30D, and 45W credits.
The Treasury Department and the
IRS have concluded that including upfit-
ters in the definition of “manufacturer”
is consistent with the statutory language
of section 30D and the CAA regulations,
as well as Congressional intent to incen-
tivize the development and purchase of
non-ICE vehicles. Accordingly, the final
regulations modify the multiple manu-
facturer rule to allow a manufacturer that
modifies a new vehicle into either a new
clean vehicle or a qualified commercial
clean vehicle to enter into an agreement
under section 30D(d)(3) if such modifica-
tion occurs prior to the new motor vehicle
being placed in service.
The same commenter requested that
the final regulations allow this rule to
apply retroactively for purposes of the
section 45W credit for upfitters that mod-
ify new vehicles into qualified commer-
cial clean vehicles. Section III.A.23 of this
Summary of Comments and Explanation
of Revisions concerning the definition
of qualified manufacturer addresses this
comment.
One commenter suggested that final
regulations provide robust oversight of
OEMs, including mandatory reporting
of certain economic impacts including
the collective bargaining status of final
assembly plants, and repurposing the
EPA’s Clean School Bus Program’s OEM
Job Quality and Workforce Development
questionnaire. This comment is beyond
the scope of the final regulations and is
not adopted.
The final regulations adopt the pro-
posed definition of “manufacturer” with
the modification regarding upfitters. In
addition, the final regulations move the
definition to §1.30D-2(b).
18. Manufacturer’s Suggested Retail
Price (MSRP)
Proposed §1.30D-2(c) provided that
for purposes of the MSRP limitation in
section 30D(f)(11)(A), “manufacturer’s
suggested retail price” means the sum of:
(A) the retail price of the automobile sug-
gested by the manufacturer as described
in 15 U.S.C. 1232(f)(1); and (B) the retail
delivered price suggested by the man-
ufacturer for each accessory or item of
optional equipment, physically attached
to such automobile at the time of its deliv-
ery to the dealer, which is not included
within the price of such automobile as
stated pursuant to 15 U.S.C. 1232(f)(1),
as described in 15 U.S.C. 1232(f)(2). This
price information is reported on the label
that is affixed to the windshield or side
window of the vehicle, as described in 15
U.S.C. 1232.17.
One commenter stated that the deter-
mination of MSRP by manufacturers is
not well-regulated, and that the final regu-
lations should restrict manufacturers from
setting an artificially low MSRP. The com-
menter suggested that the MSRP should
be the actual out the door price paid, and
should be limited so that the average cash
price paid by consumers does not exceed
the MSRP set by manufacturers. Another
commenter suggested that the vehicle’s
base price (exclusive of accessories) be
used to determine whether a vehicle’s
price is under the limitation to be eligible
for the section 30D credit.
Section 30D(f)(11) restricts vehicle
eligibility for the section 30D credit on
the basis of MSRP, not on the basis of
actual price paid. In addition, the Trea-
sury Department and the IRS have deter-
mined that the MSRP should include
not just the base MSRP described in 15
U.S.C. 1232(f)(1), but also the portion of
the MSRP described in 15 U.S.C. 1232(f)
(2) (each accessory or item of optional
equipment, physically attached to the
automobile at the time of its delivery to
the dealer) because looking solely at base
MSRP could encourage manufacturers
to artificially lower the base MSRP and
increase the amount of the MSRP allo-
cated to accessories or items of optional
equipment in an attempt to circumvent the
MSRP limitations. Accordingly, the final
regulations do not adopt the comments.
The final regulations adopt the pro-
posed definition and move it to §1.30D-
2(b).
19. New Clean Vehicle
Proposed §1.30D-2(m) defined “new
clean vehicle” as a vehicle that meets the
requirements described in section 30D(d).
Under the proposed regulations, a new
clean vehicle would not include any vehi-
cle for which the qualified manufacturer:
(1) fails to provide a periodic written
report for such vehicle prior to the vehicle
being placed in service, reporting the VIN
of such vehicle and certifying compliance
with the requirements of section 30D(d);
(2) provides incorrect information with
respect to the periodic written report for
such vehicle; (3) fails to update its peri-
odic written report in the event of a mate-
rial change with respect to such vehicle;
or (4) fails to meet the requirements of
proposed §1.30D-6(d) for new clean vehi-
cles placed in service after December 31,
2024. For purposes of section 30D(d)(6),
the term “new clean vehicle” includes any
new qualified fuel cell motor vehicle (as
defined in section 30B(b)(3)) that meets
the requirements under section 30D(d)(1)
(G) and (H).
Several commenters suggested that
the Treasury Department and the IRS
not allow leased vehicles to bypass the
stringent domestic-sourcing requirements
under section 30D by making the section
45W credit available for such vehicles.
Another commenter asked whether the
Modified AGI limitation would apply
to the lessor or lessee if a clean vehicle

Bulletin No. 2024–22 1267 May 28, 2024
is leased to individuals and, if used for
business purposes, would fall within sec-
tion 45W. Section 30D and section 45W
each include a no double benefit rule. See
section 30D(f)(2) and section 45W(d)(3).
This demonstrates that under the statutory
framework, certain vehicles may qual-
ify for both the section 30D credit and
the section 45W credit, and that in such
instances, the taxpayer must choose which
credit to claim. Further, as described in
IRS Fact Sheet FS-2023-22, Topic G,
Q5-7, a taxpayer that leases clean vehi-
cles to its customers as its business may
be eligible to claim the section 45W credit
if the taxpayer is the owner of such vehi-
cles for Federal income tax purposes. The
owner of the vehicle is determined based
on whether the lease is respected as a lease
or is recharacterized as a sale for Federal
income tax purposes. The Modified AGI
limitation, if applicable, applies to the
owner of the vehicle who places it in ser-
vice for use or lease, and not to the lessee.
Accordingly, the final regulations do not
adopt these comments.
One commenter expressed concern that
vehicles used in a courtesy transportation
program would be ineligible for the sec-
tion 30D credit upon a later sale due to
the original use rule of section 30D(d)(1)
(A). Because the original use rule is stat-
utory, the final regulations do not adopt
this comment. However, the owner of the
vehicle that is used in a courtesy transpor-
tation program may itself be able to claim
a section 30D credit.
Section 30D(d)(1)(F) requires the vehi-
cle to be propelled to a significant extent
by an electric motor that draws electricity
from a battery that has a capacity of not
less than 7 kilowatt hours, and is capa-
ble of being recharged from an external
source of electricity. One commenter
requested that the final regulations define
“significant extent” in the context of sec-
tion 30D(d)(1)(F), but did not propose
a definition. Given the purpose of this
requirement to distinguish ICE vehicles
from battery electric vehicles and plug-in
hybrid electric vehicles, and the possi-
bility for technical change in this area, it
would be impracticable to precisely define
the term. For these reasons, the final regu-
lations do not adopt this comment.
Finally, one commenter suggested
making the VINs of eligible vehicles
available in an accessible, dealer-facing
database, which would allow dealers to
use a common source to readily identify
which vehicles are eligible for the section
30D credit, reduce confusion, and improve
deployment. This comment is outside of
the scope of these final regulations. How-
ever, the Treasury Department and the
IRS, together with the DOE, have pro-
vided public-facing information regarding
vehicle eligibility via the IRS website and
https://fueleconomy.gov and will continue
to develop such information in a way that
is accessible to dealers and taxpayers.
The final regulations adopt the pro-
posed definition of “new clean vehicle”
with clarifying language that new clean
vehicles include battery electric vehicles,
plug-in hybrid electric vehicles, fuel cell
motor vehicles, and plug-in hybrid fuel
cell motor vehicles.
20. New Qualified Fuel Cell Motor
Vehicle
To provide additional clarity to taxpay-
ers, the final regulations add a definition
of a “new qualified fuel cell motor vehi-
cle” to §1.30D-2(b) that is consistent with
section 30D(d)(6). Specifically, the final
regulations define “new qualified fuel
cell motor vehicle” to be any new quali-
fied fuel cell motor vehicle (as defined in
section 30B(b)(3)) that meets the require-
ments under section 30D(d)(1)(G) (that
is, the final assembly in North America
requirement) and (H) (that is, the seller
report requirement), and that does not
have a clean vehicle battery. This defini-
tion includes otherwise qualifying vehi-
cles that have only a “start-stop” battery,
because such a battery is not a clean vehi-
cle battery.
21. Non-traceable Battery Materials /
Impracticable-to-trace Battery Materials
Proposed §1.30D-6(a)(13)(i) defined
“non-traceable battery materials” to mean
specifically identified low-value battery
materials that may originate from multiple
sources and are often commingled during
refining, processing, or other production
processes by suppliers to such a degree
that the qualified manufacturer cannot,
due to current industry practice, feasibly
determine and attest to the origin of such
battery materials. Proposed §1.30D-6(a)
(13)(ii), which was reserved, would have
provided the specific list of identified
non-traceable battery materials. In the
Explanation of Provisions to the Decem-
ber Proposed Regulations, the Treasury
Department and the IRS, after extensive
consultation with the DOE, stated that
they would consider whether the fol-
lowing applicable critical minerals (and
associated constituent materials) may be
designated as identified non-traceable bat-
tery materials: applicable critical minerals
contained in electrolyte salts, electrode
binders, and electrolyte additives.
The Treasury Department and the IRS
received a number of comments with
respect to the definition of “non-traceable
battery materials” as well as the related
FEOC Restriction transition rule for
non-traceable battery materials. Section
III.D of this Summary of Comments and
Explanation of Revisions discusses these
comments.
Consistent with the expectation and
requirement that OEMs will develop thor-
ough tracing processes in the future, even
while such processes do not now exist, the
final regulations retain the list but change
the name to “impracticable-to-trace bat-
tery materials.” The final regulations
adopt the proposed definition and move
it to §1.30D-2(b). Specifically, the final
regulations define “identified impractica-
ble-to-trace battery materials” as applica-
ble critical minerals in the following cir-
cumstances: graphite contained in anode
materials (both synthetic and natural) and
applicable critical minerals contained in
electrolyte salts, electrode binders, and
electrolyte additives.
22. Processing
Proposed §§1.30D-3(c)(13) and
1.30D-6(a)(14) defined “processing” as
the non-physical processes involved in
the refining of non-recycled substances
or materials, including the treating, bak-
ing, and coating processes used to convert
such substances and materials into constit-
uent materials. The proposed regulations
further provided that processing begins
when chemical or thermal processes,
or the combination of them, are used on
extracted minerals or natural resources or
manmade minerals or resources to create

May 28, 2024 1268 Bulletin No. 2024–22
a new product that, through subsequent
steps in the applicable critical minerals
supply chain, will be processed into a
final constituent material. Under the pro-
posed regulations, processing included the
chemical or thermal processes involved in
refining, but did not include the physical
processes involved in refining.
One commenter requested that the final
regulations include high temperature heat
treatment among the listed non-physical
processes involved in refining that con-
stitute processing to ensure that graphi-
tization is included as processing. High
temperature heat treatment is a thermal
process, so it is already included in the
definition of processing. Therefore, the
commenter’s requested modification is
unnecessary.
Another commenter specifically
requested that the final regulations address
a fact pattern in which lithium carbonate is
procured from an ally of the United States
that is not a country with which the United
States has a free trade agreement in effect,
but is processed into both lithium hydrox-
ide and cathode active material in the
United States or a country with which the
United States has a free trade agreement
in effect. Lithium carbonate is a form of
an applicable critical mineral specified in
45X(c)(6); therefore, it is subject to the
Critical Minerals Requirement. Lithium
carbonate that is procured from a region
that is not in the United States or a coun-
try with which the United States has a free
trade agreement in effect but is processed
in the United States may be counted in the
numerator of the qualifying critical min-
eral content calculation to the extent of the
value added in the United States.
A number of commenters requested
clarification on the line between extraction
and processing. One commenter requested
that the final regulations clarify that minor
treatments necessary to render raw mate-
rials transportable are not processing
(as chemical or thermal refining), but
are instead extraction (as beneficiation).
Another commenter noted that evolving
technologies, such as glycine leaching
technology, simplify value chains and
may not uniquely fit into the proposed
definitions of “extraction” or “process-
ing.” One commenter recommended nar-
rowing the definition of “processing” to
exclude processes performed during bat-
tery manufacturing. Another commenter
requested that the final regulations pro-
vide additional examples of different pro-
curement chains that illustrate where the
extraction and processing steps begin and
end. Finally, another commenter proposed
alternative definitions of “extraction” and
“processing” that conform with the com-
menter’s view of industry practice, rather
than distinguish between physical and
non-physical processes. That same com-
menter requested that the final regulations
clarify that smelting nickel is extraction
rather than processing, again consistent
with the commenter’s view of industry
practice. The Treasury Department and
the IRS note that smelting nickel is a
thermal process and is therefore already
included in the proposed definition of
“processing.” Further, the proposed regu-
lations expressly list, in the definitions of
“extraction” and “processing,” production
steps that are generally high value add,
and it is likely not possible to generate an
exhaustive list given the variety of pro-
duction steps that may apply to the various
applicable critical minerals. Moreover, the
proposed regulations are more adminis-
trable than a rule based on industry stan-
dards, which may change in the future.
Accordingly, the final regulations do not
adopt these comments.
The final regulations adopt the defini-
tion of “processing” in proposed §§1.30D-
3(c)(13) and 1.30D-6(a)(14), consolidate
it into a single provision, and move it to
§1.30D-2(b).
23. Qualified Manufacturer
Proposed §1.30D-3(c)(15), applicable
to the Critical Minerals and Battery Com-
ponents Requirements, defined a “qual-
ified manufacturer” as a manufacturer
described in section 30D(d)(3). Proposed
§1.30D-2(l), applicable as a general defi-
nition for section 30D purposes, similarly
defined a “qualified manufacturer” as a
manufacturer that meets the requirements
described in section 30D(d)(3). In addi-
tion, proposed §1.30D-2(l) provided that
the term “qualified manufacturer” does
not include any manufacturer whose qual-
ified manufacturer status has been termi-
nated by the IRS for fraud, intentional dis-
regard, or gross negligence with respect to
any requirements of section 30D, includ-
ing with respect to the periodic written
reports described in section 30D(d)(3)
and proposed §1.30D-2(m), and any attes-
tations, documentation, or certifications
described in proposed §§1.30D-3(e) and
1.30D-6(d), at the time and in the manner
provided in the Internal Revenue Bulletin
(see §601.601 of this chapter).
As in discussed in section III.A.17 of
this Summary of Comments and Expla-
nation of Revisions concerning the defi-
nition of “manufacturer,” a commenter
requested that the proposed multiple
manufacturer rule be modified to include
upfitters as manufacturers. The same
commenter requested that the final regu-
lations allow upfitters to rely on any final
regulations as of January 1, 2023, register
as qualified manufacturers after the final
regulations are published, and include in
such upfitters’ first periodic written report
to the IRS information regarding all vehi-
cles that the upfitter asserts are eligible for
the section 45W credit. This comment is
outside the scope of the final regulations
because (i) it pertains to the section 45W
credit, and (ii) the qualified manufacturer
registration process is addressed in Reve-
nue Procedure 2023-33 and other sub-reg-
ulatory guidance. Accordingly, the final
regulations do not adopt this comment.
However, in considering the com-
ment regarding upfitters, the Treasury
Department and the IRS have determined
that it is necessary to clarify when qual-
ified manufacturer status is determined.
Accordingly, the final regulations clarify
that, for purposes of determining whether
the qualified manufacturer requirement of
section 30D(d)(1)(C) is met, a new clean
vehicle is made by a qualified manufac-
turer if it is made by a manufacturer that is
a qualified manufacturer at the time a writ-
ten report is submitted to the IRS under
a qualified manufacturer agreement, as
described in section 30D(d)(3). This rule
is consistent with section 30D, as well as
its underlying purpose of incentivizing
clean vehicle deployment. Further, under
this rule, a vehicle made by a manufac-
turer that was not a qualified manufacturer
at the time of production may still qual-
ify as a new clean vehicle, provided the
manufacturer becomes a qualified manu-
facturer and submits a written report to the
IRS prior to the time the vehicle is sold.
In addition, The Treasury Department and

Bulletin No. 2024–22 1269 May 28, 2024
the IRS lack authority to provide retro-
active relief with respect to vehicles that
were sold prior to the time the qualified
manufacturer submitted a periodic written
report to the IRS under the qualified man-
ufacturer agreement. Finally, the qualified
manufacturer requirements of sections
30D(d)(1)(C) and 30D(d)(3), and there-
fore these final regulations, also apply for
purposes of sections 25E and 45W. See
sections 25E(c)(1)(D)(i) and 45W(c)(1).
Therefore, a vehicle made by a manufac-
turer that was not a qualified manufacturer
at the time of production — including a
vehicle produced prior to enactment of the
IRA, when there were no qualified manu-
facturer rules with respect to section 30D
— may qualify as a previously-owned
clean vehicle, provided the manufacturer
becomes a qualified manufacturer and
submits a written report to the IRS prior
to the time the vehicle is sold. Consistent
with this rule and with the statute, the final
regulations provide that the IRS may ter-
minate qualified manufacturer status for
fraud, intentional disregard, or gross neg-
ligence with respect to any requirement of
section 25E or section 45W or any regula-
tions thereunder.
The final regulations adopt the pro-
posed definition of “qualified manufac-
turer” with the modification described
previously, and move it §1.30D-2(b).
24. Recycling
Proposed §§1.30D-6(a)(15) and
1.30D-3(c)(19) defined “recycling” as the
series of activities during which recycla-
ble materials containing applicable criti-
cal minerals are transformed into specifi-
cation-grade commodities and consumed
in lieu of virgin materials to create new
constituent materials; such activities result
in new constituent materials contained in
the battery from which the electric motor
of a new clean vehicle draws electricity.
Under the proposed regulations, all phys-
ical, chemical, and thermal treatments or
modifications that convert recycled feed-
stocks to specification grade constituent
materials are included in recycling. The
Explanation of Provisions to the April
Proposed Regulations noted that this defi-
nition aligns with the current methods of
direct, hydrometallurgical, or pyrometal-
lurgical recycling that are utilized com-
mercially for reuse of materials for battery
applications.
In addition, proposed §1.30D-6(c)(4)
(ii)(D), provided that, for purposes of
the FEOC Restriction, an applicable crit-
ical mineral and associated constituent
material that is recycled is subject to the
FEOC-compliance determination if the
recyclable material (1) contains an appli-
cable critical mineral, (2) contains material
that was transformed from an applicable
critical mineral, or (3) is used to produce
an applicable critical mineral at any point
during the recycling process. Under the
proposed regulations, the determination
of whether an applicable critical mineral
or associated constituent material that is
incorporated into a battery via recycling is
FEOC-compliant took into account only
activities that occurred during the recy-
cling process.
One commenter noted that the defini-
tion of “recycling” is vague and does not
clearly define which recycling steps (for
example, shredding, separating, produc-
ing black mass, and critical mineral refine-
ment processing) can and cannot occur
within a FEOC. The commenter requested
that the final regulations clarify that all
recycling activities must occur in a non-
FEOC facility for the recycled material to
qualify as FEOC-compliant in a new clean
vehicle battery. Under the proposed reg-
ulations, the determination of whether an
applicable critical mineral or associated
constituent material that is incorporated
into a battery via recycling is FEOC-com-
pliant already takes into account all recy-
cling activities. Accordingly, the sug-
gested clarification is unnecessary.
Another commenter recommended
that the Treasury Department and the IRS
work with the DOE and other agencies
to develop safeguards to prevent batter-
ies from being recycled before the end
of their useful lives by entities seeking to
convert non-FEOC-compliant batteries
into FEOC-compliant batteries through
recycling. Critical minerals and associ-
ated constituent materials are subject to
both the Critical Minerals Requirement
and the FEOC Restriction. The Critical
Minerals Requirement generally looks to
the value of the recycled materials. Due to
this requirement, as well as market forces,
it will generally be uneconomical to recy-
cle batteries before the end of their useful
lives for purposes of the FEOC Restric-
tion. Accordingly, the final regulations do
not adopt this comment.
The final regulations consolidate the
definition of “recycling” in proposed
§§1.30D-3(c)(19), 1.30D-6(a)(15), and
1.30D-6(c)(4)(ii)(D) into a single provi-
sion, and move it to §1.30D-2(b). Specif-
ically, the final regulations define “recy-
cling” as the series of activities during
which recyclable materials containing
applicable critical minerals are trans-
formed into specification-grade commod-
ities and consumed in lieu of virgin mate-
rials to create new constituent materials;
such activities result in new constituent
materials contained in the clean vehicle
battery. Under the final regulations, all
physical, chemical, and thermal treatments
or modifications that convert recycled
feedstocks to specification-grade constit-
uent materials are included in recycling.
Further, recycled applicable critical min-
erals and associated constituent materials
are only subject to the requirements under
§§1.30D-3 and 1.30D-6 if the recyclable
material contains an applicable critical
mineral, contains material that was trans-
formed from an applicable critical min-
eral, or if the recyclable material is used
to produce an applicable critical mineral
at any point during the recycling process.
The requirements under §§1.30D-3 and
1.30D-6 only take into account activities
that occurred during the recycling process.
The final regulations also add an exam-
ple that illustrates which activities are
taken into account with respect to recy-
cling for purposes of the Critical Minerals
Requirement and the FEOC Restriction.
25. Section 30D Regulations
Proposed §1.30D-2(f) defined “sec-
tion 30D regulations” to mean §§1.30D-1
through 1.30D-4. The final regulations
modify the definition to mean §§1.30D-1
through 1.30D-6, and move it to §1.30D-
2(b).
26. Seller Report
Proposed §1.30D-2(j) defined “seller
report” as 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 manner provided in, and containing

May 28, 2024 1270 Bulletin No. 2024–22
the information described in, guidance
published in the Internal Revenue Bulletin
(see §601.601 of this chapter). The pro-
posed regulations further provided that the
seller report must be provided to the IRS
electronically. In addition, the proposed
regulations provided that the term “seller
report” does not include a report rejected
by the IRS due to the information con-
tained therein not matching IRS records.
The final regulations adopt the proposed
definition and move it to §1.30D-2(b).
One commenter requested that the IRS
issue a form, with related instructions, for
making seller reports to taxpayer/purchas-
ers as required by §30(D)(d)(1)(H). The
Treasury Department and the IRS have
issued such a form, Form 15400, Clean
Vehicle Seller Report.
27. Value
Proposed §1.30D-3 defined “value,”
with respect to property, as the arm’s-
length price that was paid or would be
paid for the property by an unrelated pur-
chaser determined in accordance with the
principles of section 482 of the Code and
regulations thereunder. The final regula-
tions adopt the proposed definition and
move it to §1.30D-2(b).
One commenter recommended that the
Treasury Department and the IRS consider
how the term “value” might be defined in
a manner that accommodates and incen-
tivizes further technological innovation,
increased performance and efficiency, and
minimization of environmental impacts.
The commenter, however, did not propose
a specific modification to the definition.
The final regulations, consistent with the
proposed regulations, define “value” in
accordance with longstanding tax law
principles.
28. Vehicle Classifications
Proposed §1.30D-2(g) provided that
the vehicle classification of a new clean
vehicle is to be determined consistent with
the EPA’s fuel economy labeling rules and
definitions provided in 40 CFR 600.315-
08 for vans, sport utility vehicles, pickup
trucks, and other vehicles. Specifically,
“van” means a vehicle classified as a van
or minivan under 40 CFR 600.315-08(a)
(2)(iii) and (iv), or otherwise so classified
by the Administrator of the EPA pursuant
to 40 CFR 600.315-08(a)(3)(ii); “sport
utility vehicle” means a vehicle classified
as a small sport utility vehicle or stan-
dard sport utility vehicle under 40 CFR
600.315-08(a)(2)(v) and (vi), or otherwise
so classified by the Administrator of the
EPA pursuant to 40 CFR 600.315-08(a)(3)
(ii); “pickup truck” means a vehicle clas-
sified as a small pickup truck or standard
pickup truck under 40 CFR 600.315-08(a)
(2)(i) and (ii), or otherwise so classified by
the Administrator of the EPA pursuant to
40 CFR 600.315-08(a)(3)(ii); and “other
vehicle” means any vehicle classified in
one of the classes of passenger automo-
biles listed in 40 CFR 600.315-08(a)(1),
or otherwise so classified by the Admin-
istrator of the EPA pursuant to 40 CFR
600.315-08(a)(3)(ii).
One commenter commended the Trea-
sury Department’s and the IRS’s decision
to align the section 30D vehicle classifi-
cation definitions with existing EPA reg-
ulations, which incorporate certain classi-
fication flexibility. For added clarity, the
commenter recommended that the final
regulations adopt by reference less spe-
cific pin cites in the EPA fuel economy
labeling regulations to better reflect EPA’s
general classification authority. In particu-
lar, the commenter suggested that the final
regulations define a sport utility vehicle
by citing 40 CFR 600.315-08(a)(1), which
states that the EPA Administrator may
classify passenger automobiles by car line
into one of the classes based on interior
volume index or seating capacity except
for those that the Administrator deter-
mines are most appropriately placed in a
different classification. Additionally, the
commenter suggested that the final regula-
tions define pickup truck by citing 40 CFR
600.315-08(a)(2) or 40 CFR 600.315-08
generally rather than 40 CFR 600.315-
08(a)(3)(ii). After consultation with the
EPA, the Treasury Department and the
IRS agree that a more general cross-ref-
erence to EPA’s classification authority is
warranted, given the authority not only
in 40 CFR 600.315-08(a)(3)(ii) but also
in 40 CFR 600.315-08(a)(1) and (2). The
final regulations adopt the comment and
modify the definitions accordingly.
Another commenter requested that the
MSRP limitation under section 30D(f)(11)
(B) be expanded to apply to all crossover
vehicles similar to the regime described
in 40 CFR 600.315-08, which would fur-
ther incentivize automakers to onshore
electric vehicle supply chains by making
additional vehicles eligible for the sec-
tion 30D credit. The Treasury Department
and the IRS note that crossover vehicles
are included in the vehicle classifications
subject to the appropriate MSRP limita-
tion. Under the EPA fuel economy label-
ing regulations, crossover vehicles may be
categorized as either a sport utility vehicle
or other vehicle. The Treasury Department
and the IRS adopted the EPA fuel econ-
omy labeling definitions in part because
they are reported on the vehicle label and
are accessible on https://fueleconomy.gov,
making the classification accessible to
both consumers and the IRS. In addition,
the EPA fuel economy labeling definitions
provide some discretion, which EPA may
exercise to align its classifications with
consumer expectations regarding vehicle
type. Because the proposed regulations
already adopt the regime suggested by
commenters and because the MSRP lim-
itation is prescribed by statute, the final
regulations do not adopt this comment.
A different commenter requested that
low-speed vehicles be included in the
“other vehicles” classification under pro-
posed §1.30D-2(g)(5), noting that they
are commercial, street-legal vehicles.
However, as the commenter notes, a new
clean vehicle must be treated as a motor
vehicle for purpose of title II of the Clean
Air Act as described in section 30D(d)(1)
(D). Under section 216 of the title II of the
Clean Air Act, a motor vehicle is defined
as “any self-propelled vehicle designed
for transporting persons or property on a
street or highway.” 42 U.S.C. § 7550(2).
EPA regulations at 40 CFR 85.1703(e)(1)
further define a motor vehicle under title
II of the Clean Air Act to exclude vehicles
with maximum speeds of 25 miles per
hour, which excludes low-speed vehicles.
Because section 30D requires new clean
vehicles to meet Clean Air Act standards,
which exclude low-speed vehicles, the
final regulations do not adopt this com-
ment.
Some commenters praised the proposed
implementation of the fuel economy label-
ing regime, whereas others claimed there
is a potential for misclassifying vehicles
given the lessened emphasis on weight

Bulletin No. 2024–22 1271 May 28, 2024
and other physical characteristics as major
classification factors under EPA standards
as compared to gas-powered vehicles. In
particular, a commenter stated the pro-
posed vehicle classification regime is arbi-
trary and unreliable, due to the EPA’s sub-
jective authority granted without explicit
authorization found in title I of the IRA.
The commenter requested that the final
regulations use objective vehicle classifi-
cation standards, such as those found in 40
CFR 600.002, rather than subjective EPA
determinations. An additional commenter
stated that light trucks and SUVs in par-
ticular may be misclassified as passenger
cars if physical characteristics are over-
looked for emissions.
The Treasury Department and the IRS
previously considered adopting the vehi-
cle classification definitions used by the
CAFE standards in 40 CFR 600.002, as
described in Notice 2023-1. After con-
sultation with the DOE and the EPA, as
provided for in section 30D(f)(11)(C), the
Treasury Department and the IRS deter-
mined that the fuel economy labeling
standards in 40 CFR 600.315-08 better
reflect consumer expectations and mar-
keting practices regarding vehicle clas-
sifications. In addition, the vehicle clas-
sification, as determined under the fuel
economy labeling standards, is shown on
the vehicle label and is otherwise acces-
sible on https://fueleconomy.gov, making
the classification accessible to both con-
sumers and the IRS. In contrast, a par-
ticular vehicle’s classification under the
CAFE standard is not publicly available
information under current practices. For
these reasons, the final regulations do not
adopt the comments.
The final regulations adopt the pro-
posed definition, with more general
cross-references to EPA’s classification
authority, and move it to §1.30D-2(b).
B. Critical minerals and battery
components requirements
Section 30D(e) provides requirements
for critical minerals and battery compo-
nents with respect to clean vehicle bat-
teries. The Critical Minerals and Battery
Components Requirements apply to appli-
cable critical minerals and battery compo-
nents, respectively, contained in a battery.
The April Proposed Regulations set forth
rules for the Critical Minerals and Battery
Components Requirements in proposed
§1.30D-3. The final regulations reorga-
nize the rules of the Critical Minerals and
Battery Components Requirements.
First, the proposed regulations
included, in proposed §1.30D-3(c), defini-
tions applicable for purposes of the Crit-
ical Minerals and Battery Components
Requirements. As noted previously in
section III.A of this Summary of Com-
ments and Explanation of Revisions, the
final regulations move many of these defi-
nitions to §1.30D-2(b), as general defini-
tions for purposes of section 30D and the
section 30D regulations. The final regula-
tions retain the definitions applicable to
the calculations of the Critical Minerals
Requirement in §1.30D-3(c)(1), and the
definitions applicable to and the Battery
Components Requirement in §1.30D-3(c)
(2). Second, the final regulations include
rules for the calculation of qualifying crit-
ical mineral content for purposes of the
Critical Minerals Requirement in §1.30D-
3(a), and for the calculation of qualifying
battery component content for purposes
of the Battery Components Requirement
in §1.30D-3(b). Third, the final regula-
tions finalize, as §1.30D-3(d),
7
the rules
for upfront review of the Critical Minerals
and Battery Components Requirements.
Fourth, the final regulations add a new
rule for new qualified fuel cell motor vehi-
cles as §1.30D-3(e). Finally, in response
requests from commenters, the final reg-
ulations add examples that illustrate the
calculations under the Critical Minerals
and Battery Components Requirements as
§1.30D-3(f).
1. Critical Minerals Requirement
Proposed §1.30D-3(a)(1) provided
that that Critical Minerals Requirement
was met if the qualifying critical mineral
content of the clean vehicle battery of the
vehicle is equal to or exceeds the applica-
ble critical minerals percentage provided
in section 30D(e)(1)(B) and proposed
§1.30D-3(a)(2). Proposed §1.30D-3(c)
(18) defined “qualifying critical mineral
content’’ as the percentage of the value
of the applicable critical minerals con-
tained in the clean vehicle battery that
were extracted or processed in the United
States, or in any country with which the
United States has a free trade agreement in
effect, or were recycled in North America.
The April Proposed Regulations pro-
vided a three-step process (50% Value
Added Test) for determining the quali-
fying critical mineral content of a clean
vehicle battery.
First, qualified manufacturer would
determine the procurement chain or
chains for each applicable critical mineral.
Proposed §1.30D-3(c)(14) defined a “pro-
curement chain” as a common sequence
of extraction, processing, or recycling
activities that occur in a common set
of locations, concluding in the produc-
tion of constituent materials. In addition,
proposed §1.30D-3(c)(14) clarified that
sources of a single applicable critical
mineral may have multiple procurement
chains if, for example, one source of the
applicable critical mineral undergoes the
same extraction, processing, or recycling
process in different locations. Each appli-
cable critical mineral procurement chain
would be evaluated separately pursuant to
proposed §1.30D-3(a)(3)(ii).
Second, qualified manufacturers would
evaluate each applicable critical mineral
procurement chain in the clean vehicle
battery to determine whether critical min-
erals procured from the chain have been
(1) extracted or processed in the United
States, or in any country with which the
United States has a free trade agreement in
effect, or (2) recycled in North America.
Applicable critical minerals that satisfy
this requirement are considered qualifying
critical minerals. Proposed §1.30D-3(c)
(17) defined ‘‘qualifying critical min-
eral’’ as an applicable critical mineral that
is extracted or processed in the United
States, or in any country with which the
United States has a free trade agreement in
effect, or that is recycled in North Amer-
ica. Proposed §1.30D-3(c)(17) used a 50
7
The April Proposed Regulations reserved proposed §1.30D-3(d) for excluded entities. The December Proposed Regulations modified proposed §1.30D-3(d) to include a cross reference to
the rules for excluded entities in proposed §1.30D-6. These final regulations finalize those rules in §1.30D-6; §1.30D-3(d) is deleted as unnecessary.

May 28, 2024 1272 Bulletin No. 2024–22
percent threshold to determine whether
an applicable critical mineral is a “qual-
ifying critical mineral.” Thus, under the
proposed regulations, an applicable crit-
ical mineral was treated as extracted or
processed in the United States, or in any
country with which the United States has
a free trade agreement in effect, if: (1) 50
percent or more of the value added to the
applicable critical mineral by extraction is
derived from extraction that occurred in
the United States or in any country with
which the United States has a free trade
agreement in effect; or (2) 50 percent
or more of the value added to the appli-
cable critical mineral by processing is
derived from processing that occurred in
the United States or in any country with
which the United States has a free trade
agreement in effect. An applicable critical
mineral would be treated as recycled in
North America if 50 percent or more of the
value added to the applicable critical min-
eral by recycling is derived from recycling
that occurred in North America. Proposed
§1.30D-3(c)(25) defined “value added,”
with respect to recycling, extraction, or
processing of an applicable critical min-
eral, as the increase in the value of the
applicable critical mineral attributable to
the relevant activity.
Third, qualified manufacturers would
calculate qualifying critical mineral con-
tent. Under proposed §1.30D-3(a)(3)(i),
qualifying critical mineral content would
be calculated as the percentage that results
from dividing the total value of qualifying
critical minerals by the total value of crit-
ical minerals. Proposed §1.30D-3(c)(23)
defined ‘‘total value of qualifying critical
minerals’’ as the sum of the values of all
the qualifying critical minerals contained
in a battery described in proposed §1.30D-
3(a)(1). Proposed §1.30D-3(c)(22) defined
‘‘total value of critical minerals’’ as the
sum of the values of all applicable critical
minerals contained in a battery described
in proposed §1.30D-3(a)(1).
Proposed §1.30D-3(a)(3)(iii) required
qualified manufacturers to select a date for
determining the values associated with the
total value of qualifying critical minerals
(determined separately for each procure-
ment chain) and the total value of critical
minerals. Such date needs to be after the
final processing or recycling step for the
applicable critical minerals relevant to the
certification described in section 30D(e)
(1)(A) of the Code and should be uni-
formly applied for all applicable critical
minerals contained in the battery.
Proposed §1.30D-3(a)(3)(iv) provided
that a qualified manufacturer may deter-
mine qualifying critical mineral content
based on the value of the applicable crit-
ical minerals actually contained in the
clean vehicle battery of a specific vehicle.
Alternatively, for purposes of calculating
the qualifying critical mineral content for
batteries in a group of vehicles, a qualified
manufacturer could average the qualifying
critical mineral content calculation over a
limited period of time (for example, a year,
quarter, or month) with respect to vehicles
from the same model line, plant, class, or
some combination of thereof, with final
assembly (as defined in section 30D(d)(5)
of the Code and proposed §1.30D-2(b))
within North America.
The Treasury Department and the
IRS received numerous comments with
respect to the Critical Minerals Require-
ment. To the extent comments relate to
general definitions, such as “constituent
material,” “extraction,” or “processing,”
they are addressed in section III.A of this
Summary of Comments and Explanation
of Revisions.
Many commenters expressed criticism
or concerns relating to the Critical Min-
erals Requirement. Several criticized the
requirement as too strict. For example, one
commenter stated that classifying the sup-
ply chains of the United States’ allies as
non-qualifying would damage the devel-
opment of a North American supply chain.
Section 30D(e)(1) requires an analysis of
the location of supply chain activities (that
is, extraction, processing, and recycling).
Accordingly, the final regulations do not
adopt these comments.
Similarly, one commenter requested
that the Critical Minerals Requirement be
restricted to nickel, cobalt, lithium, man-
ganese, and graphite, as minerals. Because
section 30D(e)(1)(A) defines “applicable
critical minerals” by reference to section
45X(c)(6), which includes a broader list of
minerals than the five noted by the com-
menter, the final regulations do not adopt
this comment.
Many comments addressed the 50%
Value Added Test. Multiple comments
were supportive of the tests, while others
recommended that the final regulations
adopt a different rule. One commenter
suggested that, for lithium and nickel, the
final regulations replace the 50% Value
Added Test with rules that specify which
combinations of extraction and processing
are necessary for qualification as quali-
fying critical mineral content. Two com-
menters recommended that the 50% Value
Added Test be replaced with a determi-
nation based on change in tariff classifi-
cations. Several comments asserted that
the 50% Value Added Test was not strict
enough. One commenter stated that the
50% Value Added Test impermissibly
stretches the statute by substantially dilut-
ing the applicable percentage require-
ment of section 30D(e)(1)(B). Similarly,
another commenter states that the 50%
Value Added Test improperly dilutes sec-
tion 30D(e)(1)(B), and that it improperly
bifurcates the Critical Minerals Require-
ment into separate tests for extraction
and processing. Several commenters pro-
posed that the 50% Value Added Test be
increased to a higher percentage. Another
commenter requested that the 50% Value
Added Test be eliminated entirely after
2024. A different commenter requested
that guidance describing a more stringent
test under the Critical Minerals Require-
ment be provided as soon as possible,
in order to provide clarity to taxpayers,
OEMs, and battery suppliers. However,
another commenter suggested that the IRS
and the Treasury Department refrain from
drafting a replacement to the 50% Value
Add Test until supply chains are more
mature.
An applicable critical mineral may
undergo multiple steps of each of
extraction, processing, or recycling that
occur in multiple locations, and section
30D(e)(1)(A) does not specify how to
determine whether an applicable critical
mineral was extracted, processed, or recy-
cled in a statutorily-required location. To
account for this, the 50% Value Added
Test was developed to determine whether
an applicable critical mineral procurement
chain was sufficiently produced in a stat-
utory-required location to count toward
meeting the Critical Minerals Require-
ment. The 50% Value Added Test allows
qualified manufacturers to make an objec-
tive determination of when an applicable
critical mineral was produced in a manner

Bulletin No. 2024–22 1273 May 28, 2024
that would qualify under section 30D(e)
(1)(A). While some commenters have crit-
icized the 50 percent threshold as too low,
this percentage, as noted in the Explana-
tion of Provisions to the April Proposed
Regulations, was intended as a transition
rule while ensuring that a significant por-
tion of the extraction, processing, or recy-
cling activities was performed in a statu-
torily required location. The percentage
was designed with the purposes of section
30D(e)(1) in mind and to allow qualified
manufacturers time to transition supply
chains in anticipation of a more stringent
rule.
The final regulations adopt the Traced
Qualifying Value Test, described more
fully after the discussion of comments in
this section of the Summary of Comments
and Explanation of Revisions. This test is
more precise than the 50% Value Added
Test, as it requires an OEM to fully trace
any value added in each procurement
chain that it applies toward the Critical
Minerals Requirement. It is also gener-
ally more stringent, because the OEM
may treat as qualifying only a percentage
of value of an applicable critical mineral,
and not the full value. The Traced Quali-
fying Value Test credits the share of value
added by extraction or processing in the
United States or a country with which the
United States has a free trade agreement
in effect, or recycling in North America,
in determining whether the Critical Min-
erals Requirement is met. By looking to
the highest value-added percentage of the
three specified activities (extraction, pro-
cessing, or recycling) for each applicable
critical mineral procurement chain, the
Traced Qualifying Value Test appropri-
ately implements the statutory language
requiring only one of the three specified
activities with respect to an applicable crit-
ical mineral to occur in a qualifying place
in order to have the value of an applicable
critical mineral count toward satisfying
the Critical Minerals Requirement.
In response to comments suggesting
alternative approaches to determining
whether the Critical Minerals Require-
ment is satisfied, the Treasury Department
and the IRS have determined that speci-
fying combinations of extraction and pro-
cessing steps would not be administrable
given the potential number of permuta-
tions. Moreover, specifying combinations
only for certain minerals would be at odds
with the rules of section 30D(e)(1), which
apply to all critical minerals. Similarly, the
Treasury Department and the IRS have
determined that determining qualifying
mineral content based on a change in tariff
classification would not be administrable
or provide certainty to OEMs because
changes in tariff classification may not
provide the clear standards required for
purposes of tax credit eligibility determi-
nations.
The final regulations adopt the Traced
Qualifying Value Test, which is described
further below after the discussion of com-
ments in this section of the Summary of
Comments and Explanation of Revisions,
for taxable years ending after May 6, 2024.
In response to commenters who supported
the 50% Value Added Test or who sup-
ported a longer transition period, the final
regulations permit use of the 50% Value
Added Test as an optional transition rule
for vehicles for which a qualified manu-
facturer provides a periodic written report
prior to January 1, 2027, and require the
50% Value Added Test for vehicles for
which a qualified manufacturer provides
a periodic written report prior to May 6,
2024.
Several commenters to the April Pro-
posed Regulations raised questions about
how the FEOC Restriction applied to
applicable critical minerals. These ques-
tions were answered in the December
Proposed Regulations, which are finalized
herein.
Several commenters raised questions
relating to the calculation under the 50%
Value Added Test. These questions may
be relevant under these final regulations
for either the 50% Value Added Test (as
it is retained as a transition rule) or for the
Traced Qualifying Value Test, and so are
addressed herein. For example, one com-
menter requested clarification on whether
lithium carbonate or lithium ore corre-
sponding to lithium carbonate should be
used to calculate the total value of qualify-
ing critical minerals. The final regulations
clarify, in the definition of “applicable
critical mineral” in §1.30D-2(b), that the
Critical Minerals Requirement and FEOC
Restriction determinations with respect
to an applicable critical mineral take into
account each step of extraction, process-
ing, or recycling through the step in which
such mineral is processed or recycled into
an associated constituent material, even if
the mineral is not in a form listed in sec-
tion 45X(c)(6) at every step of produc-
tion. Thus, both the lithium carbonate and
lithium ore should be taken into account.
Several commenters raised specific ques-
tions about specific components of the
calculation. Another commenter requested
that the final regulations clarify that, under
step three of the 50% Value Added Test
calculation, the total value of qualifying
critical minerals and total value of criti-
cal minerals means the value of the cor-
responding constituent materials. Because
a constituent material may be composed
of an applicable critical mineral that has
multiple procurement chains, or of multi-
ple critical minerals, their values may not
necessarily correspond to the value of the
associated constituent material. Accord-
ingly, the final regulations do not adopt
this comment. Another commenter asked
whether a weighted average is used for
purposes of the 50% Value Added Test if
an applicable critical mineral has two or
more procurement chains. The same com-
menter asked if the 50% Value Added Test
can be satisfied by adding percentages
across extraction and processing. Under
both the proposed and final regulations,
the 50% Value Added Test does not use
a weighted average, and the percentages
must be examined separately for each
of extraction, processing, or recycling.
Relatedly, two commenters noted that
the proposed regulations did not provide
a methodology for distributing the val-
ue-add across procurement chains. The
proposed regulations required a separate
analysis of each procurement chain and did
not allow for analysis across procurement
chains. Because allowing analysis across
procurement chains would be at odds with
the supply-chain tracing requirements of
section 30D(e)(1), the final regulations do
not adopt these comments.
One commenter asked for clarifica-
tion on how to determine value added in
cases in which multiple applicable criti-
cal minerals are processed together, and
recommended that the final regulations
provide that value added be allocated to
each applicable critical mineral based on
weight. The proposed regulations defined
“value added” with respect to recycling,
extracting, or processing of an applicable

May 28, 2024 1274 Bulletin No. 2024–22
critical mineral as the increase in the value
of the applicable critical mineral attribut-
able to the relevant activity; the proposed
regulations did not provide a specific rule
for a case in which multiple applicable
critical minerals are processed together.
In response to this comment, the final reg-
ulations clarify that, in the case in which
multiple applicable critical mineral pro-
curement chains are part of the same pro-
cessing or recycling activity, value added
should be allocated to each procurement
chain based on relative mass.
The proposed regulations allowed
qualified manufacturers to average quali-
fying critical mineral content over a lim-
ited period of time (for example, a year,
quarter, or month) with respect to vehicles
from the same model line, plant, class, or
some combination of thereof. The Trea-
sury Department and the IRS received a
number of comments on this rule. Sev-
eral commenters were supportive of the
proposed rule or sought a broader aver-
aging rule. One commenter asked that
the final regulations expressly allow for
an 18-month averaging period. One com-
menter requested that the final regulations
consider also allowing qualified manufac-
turers to average critical mineral content
over batteries produced at a particular
facility. Similarly, another commenter
requested that the final regulations allow
automakers to calculate, on a company-
wide basis, their volume or percentage
of qualifying critical minerals and allo-
cate such minerals to specific batteries or
vehicles on a unit-by-unit or VIN-by-VIN
basis. On the other hand, several com-
menters raised concerns that the averag-
ing rule could allow for manipulation.
One commenter suggested limitations
on the averaging rule, and requested that
the final regulations require automakers
to offer a clear explanation of how they
perform the calculation, and demonstrate
to the IRS that the calculation will nei-
ther exclude any vehicles with a battery
that the automaker brings to market, nor
double count any vehicles. The com-
menter also suggested that the IRS limit
an automaker’s ability to switch between
groupings of vehicles (for purpose of
calculating the average) to minimize the
opportunity to manipulate the calculation.
The commenter further recommended
that automakers be allowed to choose a
test period (preferably as late as possible
in the year) over which to calculate aver-
age values to take advantage of growing
qualifying supply chains, but with suf-
ficient time to ensure the automaker can
determine vehicle eligibility for the tax
credit before the beginning of a calendar
year. Another commenter noted that aver-
aging qualifying critical mineral content
by alternative periods of time by model
line, plant, class, or combination thereof
with final assembly in North America may
prove an administrative burden and result
in an increased risk of manipulation, cit-
ing how anode and cathode critical min-
erals could move through the procurement
supply chain to manipulate value calcu-
lations. A separate commenter expressed
concern that the averaging rules could
allow OEMs to source critical minerals
from outside the United States and coun-
tries with which the United States has free
trade agreements in effect, yet still satisfy
the Critical Minerals Requirement. The
Treasury Department and the IRS have
determined that the proposed rules reflect
a reasonable balancing of these consider-
ations by allowing averaging, but limiting
it to groups of vehicles that may share the
same procurement chains (that is, vehicles
from the same model line, plant, class, or
some combination of thereof). In addition,
the upfront review process, finalized as
§1.30D-3(d), provides a mechanism for
review and verification of OEM calcula-
tions, which will prevent manipulation.
Finally, the time periods of a year, quarter,
or month are exemplary and do not prevent
averaging over a different time period.
However, the averaging period should be
consistent with any rules and procedures
established by the upfront review process.
Accordingly, the final regulations do not
adopt these comments.
Several commenters raised concerns
with respect to the volatility of mineral
pricing. One such commenter requested
that qualified manufacturers be given
the option to elect to average the most
common critical mineral’s value with the
historical values of that material based
on previous annual contracts. Others
requested a historical lookback period of
between eighteen months to five years.
Another commenter requested that the
Treasury Department and the IRS allow
for multiple methods of calculation to
address market fluctuations. Specifically,
the commenter recommended that to
address market fluctuations, the previous
year’s average mineral price could be
used, or a five-year average. The com-
menter further noted that this would take
into account the very large difference in
the value of the different materials, but
mitigate against market volatility. A com-
menter suggested the Treasury Depart-
ment and the IRS provide the option to
use widely-recognized and trusted market
indices to serve as an acceptable estima-
tion of the price of a particular step in
the procurement chain for which actual
prices for certain procurement chains or
portions of the procurement chain can-
not be determined by the manufacturer.
The commenter noted that contracts with
suppliers usually indicate what the “con-
trollable piece” is, essentially what cost
of that supplier’s value-add is within
the overall cost of the supplied product.
However, contracts typically do not pro-
vide a set cost for inputs, as those inputs
are price flexible based on the mineral
markets, meaning that using an estab-
lished mineral market index for cost esti-
mation would more closely reflect the
real-world prices paid for that material.
The commenter indicated that these indi-
ces may include those commonly cited in
U.S. Geological Survey reports. Finally,
commenters proposed adopting a safe
harbor provision due to the price vola-
tility of critical minerals, which would
enable producers of critical minerals to
relocate sourcing operations to the United
States or countries with which the United
States has free trade agreements in effect.
The Treasury Department and the IRS
acknowledge these commenters’ concerns
relating to mineral valuation and volatil-
ity. The averaging rules of the proposed
and final regulations are intended, in
part, to address these concerns by allow-
ing qualified manufacturers to determine
qualifying critical mineral content based
on an average value (rather than the value
at a specific time that may be unusually
high or low) and by allowing qualified
manufacturer flexibility in determining
the averaging period. Similarly, the pro-
posed and final regulations allow quali-
fied manufacturers to choose a date, after
the final processing or recycling step, for
the determination of value, which also

Bulletin No. 2024–22 1275 May 28, 2024
provides flexibility. Accordingly, the final
regulations do not adopt these comments.
Several commenters commented on
sourcing and OEM due diligence. One
commenter suggested that the final reg-
ulations require qualified manufacturers
to engage in detailed tracing, and pro-
vide related documentation to the IRS.
That commenter suggested that the pro-
cesses of the EU Battery Regulation could
provide a model. Another commenter
encouraged the Treasury Department and
the IRS to work closely with the DOE,
Environmental Protection Agency, and
Department of Transportation to explore
how a digital battery identifier could help
facilitate material sourcing transparency
and improve the efficiency of battery
repurposing and recycling. Several com-
menters suggested adopting standards
based on Organisation for Economic
Co-operation and Development (OECD)
standards. A commenter requested clarifi-
cation on what due diligence is required
with respect to battery supply chains, par-
ticularly in instances in which intermedi-
ate materials may not be sold on an open
market. The upfront review process of
§1.30D-3(d) is intended to provide clear
rules and a clear process for automakers
to provide information regarding due dili-
gence with respect to the Critical Minerals
and Battery Components Requirements
to the IRS. The Treasury Department and
the IRS are considering future sub-regula-
tory guidance with respect to the upfront
review process.
Finally, one commenter raised con-
cerns that unexpected events could affect
the supply of either applicable critical
minerals or battery components, and sug-
gested that the Treasury Department and
the IRS allow for a temporary waiver
request process in such cases, allowing
the affected minerals or components to be
excluded from the calculation under the
Critical Minerals or Battery Components
Requirements. The commenter set out a
detailed scheme for the waiver process.
Another commenter similarly requested a
waiver process in cases in which certain
production steps are affected by either
market volatility or unexpected events.
The Treasury Department and the IRS
determined that the averaging rules under
the Critical Minerals and Battery Compo-
nents Requirements allow for flexibility
in the case of both price fluctuations and
unexpected events. In addition, allowing
OEMs or their suppliers a waiver with
respect to certain production steps could
be subject to manipulation. Accordingly,
these comments are not adopted.
As under the proposed regulations,
the final regulations, under §1.30D-3(a)
(1), provide that the Critical Minerals
Requirement is met if the qualifying crit-
ical mineral content of the clean vehi-
cle battery of the vehicle is equal to or
exceeds the applicable critical minerals
percentage provided in section 30D(e)
(1)(B) and §1.30D-3(a)(2). The pro-
posed regulations included the 50%
Value Added Test for determination of
the qualifying critical mineral content.
In the Explanation of Provisions to the
April Proposed Regulations, the Treasury
Department and the IRS anticipated that
the 50% Value Added Test would serve
as a transition rule, which would provide
manufacturers time to develop the nec-
essary capability to certify compliance
with the Critical Minerals Requirement
throughout their supply chains, and the
final regulations would move to a more
stringent test. Certain commenters criti-
cized the April NPRM rules as inconsis-
tent with the statute, while others have
been supportive. Several commenters
asked for additional clarity as to how to
make the calculations and for specific
examples. Others asked that the calcu-
lation in the proposed rule be made per-
manent. Other than as described above,
commenters generally did not identify
alternative proposals for the Critical Min-
erals requirement. Consistent with this,
and taking into account the comments
received, the final regulations adopt the
following rules for determining qualify-
ing critical mineral content.
For vehicles for which a qualified
manufacturer provides a periodic written
report on or after May 6, 2024, §1.30D-
3(a)(3), as finalized, provides a three-step
process (Traced Qualifying Value Test)
for the calculation under the Critical Min-
erals Requirement.
First, the qualified manufacturer deter-
mines each procurement chain, as defined
in §1.30D-3(c)(1)(i), consistent with the
April Proposed Regulations.
Second, the qualified manufacturer
must determine the “traced qualifying
value” of all applicable critical minerals”
and the “total traced qualifying value.”
These definitions are introduced in the
final regulations. “Traced qualifying
value” is defined, in §1.30D-3(c)(1)(vii)
as, with respect to an applicable critical
mineral that is extracted and processed
into a constituent material, the value of
the applicable critical mineral multiplied
by the greater of (A) the value added to the
applicable critical mineral by extraction
that occurred in the United States or in any
country with which the United States has
a free trade agreement in effect, divided
by the total value added from extraction
of the applicable critical mineral; or (B)
the value added to the applicable critical
mineral by processing that occurred in
the United States or in any country with
which the United States has a free trade
agreement in effect, divided by the total
value added from processing of the appli-
cable critical mineral. “Traced qualifying
value” is defined as, with respect to an
applicable critical mineral that is recycled
into an associated constituent material,
the value of the applicable critical mineral
multiplied by the percentage obtained by
dividing the value added to the applicable
critical mineral by recycling that occurred
in North America by the total value added
from recycling of the applicable criti-
cal mineral. “Valued added” is defined
in §1.30D-3(c)(1)(viii), consistent with
the April Proposed Regulations. Section
1.30D-3(a)(3)(ii) provides that the traced
qualifying value of an applicable critical
mineral, including the percentage or per-
centages necessary to determine the traced
qualifying value, must be determined sep-
arately for each procurement chain. “Total
traced qualifying value,” in §1.30D-3(c)
(1)(iv), is defined as the sum of the traced
qualifying values of all applicable critical
minerals contained in the clean vehicle
battery.
Third, the qualified manufacturer
determines the qualifying critical mineral
content. Section 1.30D-3(a)(3)(i) provides
that qualifying critical mineral content is
determined by dividing the total traced
qualifying value (calculated in step 2) by
the total value of critical minerals. The
final regulations, consistent with the pro-
posed regulations, provide in §1.30D-3(c)
(1)(v) that the “total value of critical min-
erals” means the sum of the values of all

May 28, 2024 1276 Bulletin No. 2024–22
applicable critical minerals contained in a
clean vehicle battery.
Section 1.30D-3(a)(3)(iii) requires
qualified manufacturers to select a date
for determining the values associated with
the total traced qualifying value (deter-
mined separately for each procurement
chain) and the total value of critical min-
erals. Such date would need to be after the
final processing or recycling step for the
applicable critical minerals relevant to the
certification described in section 30D(e)
(1)(A) of the Code. This date would need
to be uniformly applied for all applicable
critical minerals contained in the battery.
Section 1.30D-3(a)(3)(iv) provides
that a qualified manufacturer may deter-
mine qualifying critical mineral content
based on the value of the applicable crit-
ical minerals actually contained in the
clean vehicle battery of a specific vehicle.
Alternatively, for purposes of calculating
the qualifying critical mineral content for
batteries in a group of vehicles, a qualified
manufacturer could average the qualifying
critical mineral content calculation over
a limited period of time (for example, a
year, calendar quarter, or month) with
respect to vehicles from the same model
line, plant, class, or some combination of
thereof, with final assembly within North
America.
As noted above, the Traced Qualifying
Value Test is more precise than the 50%
Value Added Test, as it requires an OEM
to fully trace any value added in each pro-
curement chain that it applies toward the
Critical Minerals Requirement. It is also
generally more stringent, because the
OEM may treat as qualifying only a per-
centage of value of an applicable critical
mineral, and not the full value. The Trea-
sury Department and the IRS also consid-
ered adapting the 50% Value Added Test
to require a higher threshold percentage
than 50%, but such an approach results
in a “cliff effect” whereby the value of
applicable critical minerals just below
the threshold percentages is not applied
toward the Critical Minerals Require-
ment while the full value of applicable
critical minerals just above the threshold
percentage is treated as qualifying, which
could lead to counter-intuitive results and
increased potential for gaming. By con-
trast, the Traced Qualifying Value Test
incentivizes each incremental increase in
value-added activities in the United States
and free trade agreement partner countries
or in North America, as applicable. For
these reasons, the Treasury Department
and the IRS have determined that this test
is the most effective of the potential alter-
natives considered in furthering the stat-
utory purpose of transitioning to secure
clean vehicle battery supply chains in the
United States and allied countries.
In order to allow for a transition to the
Traced Qualifying Value Test, the final
regulations provide that, for vehicles for
which a qualified manufacturer provides a
periodic written report on or after May 6,
2024 and prior to January 1, 2027, a qual-
ified manufacturer may calculate qualify-
ing critical mineral content under the 50%
Value Added Test. Finally, the regulations
finalize the 50% Value Added Test for
vehicles for which a qualified manufac-
turer provides a periodic written report
prior to May 6, 2024.
2. Battery Components Requirement
The final regulations adopt the Battery
Components Requirement of the April
Proposed Regulations without change.
Section §1.30D-3(c)(2)(iii) defines “qual-
ifying battery component content” as the
percentage of the value of the battery com-
ponents contained in the clean vehicle bat-
tery that were manufactured or assembled
in North America. As finalized in §1.30D-
3(b)(1), the Battery Components Require-
ment is met if the qualifying battery com-
ponent content of a clean vehicle battery is
equal to or exceeds the applicable battery
components percentage provided in sec-
tion 30D(e)(2)(B) and §1.30D-3(a)(2).
The final regulations provide a four-
step process for determining the percent-
age of the value of the battery components
in a battery that contribute toward meeting
the Battery Components Requirement.
First, qualified manufacturers deter-
mine whether each battery component in
a battery was a “North American battery
component,” that is, a battery component
substantially all of the manufacturing or
assembly of which occurs in North Amer-
ica, without regard to the location of the
manufacturing or assembly activities of
any components that make up the par-
ticular battery component (as defined in
§1.30D-3(c)(2)(ii).
Second, qualified manufacturers deter-
mine the “total incremental value of North
American battery components,” that is,
the sum of the incremental values of
each North American battery component
contained in clean vehicle battery (as
defined in §1.30D-3(c)(2)(v)). “Incremen-
tal value” is defined as, with respect to
the battery component, the value of that
battery component minus the value of the
manufactured or assembled battery com-
ponents, if any, that are contained in that
battery component (as defined in §1.30D-
3(c)(2)(i)).
Third, qualified manufacturers deter-
mine the “total incremental value of bat-
tery components,” that is, the sum of the
incremental values of each battery compo-
nent contained in a clean vehicle battery
(as defined in §1.30D-3(c)(2)(iv)).
Fourth, qualified manufacturers deter-
mine the qualifying battery component
content, by dividing the total incremental
value of North American battery compo-
nents (determined in step 2) by the total
incremental value of battery components
(determined in step 3), as provided in
§1.30D-3(b)(3)(i).
Section 1.30D-3(b)(3)(ii) requires
qualified manufacturers to select a date for
determining the values associated with the
total incremental value of North Amer-
ican battery components and the total
incremental value of battery components.
Such date needs to be after the last manu-
facturing or assembly step for the battery
components relevant to the certification
described in section 30D(e)(2)(A). This
date must be uniformly applied for all bat-
tery components contained in the battery.
Section 1.30D-3(b)(3)(iii) provides
that a qualified manufacturer may deter-
mine qualifying battery component con-
tent based on the incremental values of
the battery components actually contained
in the clean vehicle battery of a specific
vehicle. Alternatively, for purposes of cal-
culating the qualifying battery component
content for batteries in a group of vehicles,
a qualified manufacturer could average
the qualifying battery component content
calculation over a limited period of time
(for example, a year, a calendar quarter,
or a month) with respect to vehicles from
the same model line, plant, class, or some
combination of thereof, with final assem-
bly (as defined in section 30D(d)(5) of the

Bulletin No. 2024–22 1277 May 28, 2024
Code and §1.30D-2(b) of the final regula-
tions) within North America.
Finally, the final regulations, in
§1.30D-3(c)(2)(iv), clarify that the battery
module is the end point for the purpose
of calculating the value of battery com-
ponents. This clarification was noted in
the Explanation of Provisions to the April
Proposed Regulations. In addition, the
final regulations clarify that, in the case
of a cell-to-pack battery design with no
modules, the battery cell is the end point
for the purpose of calculating the value of
battery components.
The Treasury Department and the
IRS received a number of comments
with respect to the Battery Components
Requirement. Comments with respect to
generally applicable definitions, such as
“assembly,” “battery,” “battery compo-
nent,” or “manufacturing,” are discussed
in section III.A of this Summary of Com-
ments and Explanation of Revisions. This
section discusses comments with respect
to the calculation required to determine
compliance with the Battery Components
Requirement.
One commenter criticized the Battery
Components Requirement and noted that
it may reduce efficiency, cost effective-
ness, and innovation with respect to bat-
tery components. In response to this, the
Treasury Department and the IRS note
that the Battery Components Require-
ment is mandated by the statute. Simi-
larly, another commenter recommended
that battery components manufactured or
assembled in Japan be considered as qual-
ifying. However, this is prohibited by the
statute because battery components must
be manufactured or assembled in North
America to meet the Battery Components
Requirement.
A commenter asked for a more detailed
components list along with calculation
examples that include the components in
the list. As discussed in section III.A.6 of
this Summary of Comments and Expla-
nation of Revisions, the Treasury Depart-
ment and the IRS decline to amend the
list of battery components. However, the
final regulations add a new definition for
the term “battery materials,” and clar-
ify that battery materials are not battery
components. In addition, the Treasury
Department and the IRS have included in
the Summary of Comments and Explana-
tion of Revisions to the final regulations
an example calculation under the Battery
Components Requirement that references
specific components.
Proposed §1.30D-3(b)(3)(iii) provided
flexible rules that allow a qualified manu-
facturer to average the qualifying battery
component content calculation over a lim-
ited period of time (for example, a year,
quarter, or month) with respect to vehicles
from the same model line, plant, class, or
some combination of thereof. One com-
menter raised a concern that these rules
were too flexible and could create gaming
opportunities. The commenter suggested
that the final regulations clearly describe
which vehicle characteristics may be aver-
aged together and directly state that any
combination of characteristics not iden-
tified in the final regulations may not be
averaged together. Because the category
of vehicle characteristics is open-ended,
may vary by manufacturer, and is subject
to change in the future, it is not practicable
to specify certain vehicle characteristics
that are necessary for grouping. In addi-
tion, a specified list of vehicle character-
istics may not correspond to the vehicle
procurement chains of particular manu-
facturers. For these reasons, the Treasury
Department and the IRS appreciate the
concerns raised by this comment, but have
concluded that the flexibility of the pro-
posed rule is necessary in order to provide
an administrable rule to qualified manu-
facturers. In addition, the upfront review
process described in proposed §1.30D-
3(e), discussed in section III.B.3 of this
Summary of Comments and Explanation
of Revisions, will also help prevent gam-
ing of the Battery Components Require-
ment calculations. This commenter also
suggested that the Treasury Department
and the IRS maintain the right to update
which characteristics may be averaged
together in the future, should changes be
necessary. In response to this, the Trea-
sury Department and the IRS will con-
tinue to study this issue as the Treasury
Department and the IRS gain experience
with the upfront review process.
Finally, two commenters suggested
that the final regulations consider allow-
ing for a waiver of the Critical Minerals
and Battery Components Requirements
in certain cases. The statute does not pro-
vide for a waiver program; thus, the final
regulations do not adopt these comments.
Commenter proposals for a waiver pro-
cess are discussed in more detail in section
III.B.1 of this Summary of Comments and
Explanation of Revisions.
3. Upfront Review
Proposed §1.30D-3(e) provided for an
upfront review to assess a qualified man-
ufacturer’s conformance with the Crit-
ical Minerals and Battery Components
Requirements. Specifically, proposed
§1.30D-3(e) provided that for new clean
vehicles placed in service after Decem-
ber 31, 2024, the qualified manufacturer
must provide attestations, certifications,
and documentation demonstrating com-
pliance with the requirements of section
30D(e), at the time and in the manner
provided in the Internal Revenue Bulletin
(see §601.601 of this chapter). The IRS,
with analytical assistance from the DOE,
will review the attestations, certifications,
and documentation. This rule is finalized
as §1.30D-3(d).
One commenter stated that, if final reg-
ulations require qualified manufacturer
submissions, the Treasury Department and
the IRS should develop a system to protect
confidential business secrets. In response
to this, the Treasury Department and the
IRS note that they intend to continue to
engage with OEMs and other stakehold-
ers to develop the rules under the upfront
review process.
4. Rule for New Qualified Fuel Cell
Motor Vehicles
The final regulations provide in
§1.30D-3(e) that the requirements of
section 30D(e) and §1.30D-3 (Criti-
cal Minerals and Battery Components
Requirements) are deemed to be satis-
fied with respect to new qualified fuel
cell motor vehicles. Thus, the amount of
the credit with respect to these vehicles,
under section 30D(b), is $7,500. How-
ever, a qualified fuel cell motor vehicle
(as defined in section 30B(b)(3)) with a
clean vehicle battery, such as a plug-in
hybrid fuel cell electric vehicle, would
be subject to the Critical Minerals and
Battery Components Requirements
because it draws electricity from the
clean vehicle battery.

May 28, 2024 1278 Bulletin No. 2024–22
Because new qualified fuel cell motor
vehicles do not have a clean vehicle bat-
tery, these vehicles do not have applicable
critical minerals or battery components
contained in such battery that would be
subject to the Critical Minerals and Bat-
tery Components Requirements. The
IRA’s enactment of section 30D(d)(6),
which provides that new qualified fuel
cell motor vehicles are new clean vehicles
if such vehicles meet the North Ameri-
can final assembly and seller reporting
requirements (see section 30D(d)(1)(G)
and (H)), indicates that Congress intended
for these vehicles to be eligible for the
section 30D credit. Therefore, the bet-
ter reading of section 30D as a whole is
that new qualified fuel cell motor vehicles
are eligible for the full section 30D credit
amount of $7,500.
C. Special rules
Proposed §1.30D-4 provided special
rules with respect to the section 30D
credit. Among those rules, proposed
§1.30D-4(b)(5)(i) provided that, except
as provided in proposed §1.30D-4(b)(5)
(ii), in the case of a new clean vehicle
that is placed in service by a corporation
or other taxpayer that is not an individ-
ual for whom AGI is computed under
section 62, the Modified AGI limitation
does not apply. One commenter expressed
concern about individuals circumventing
the Modified AGI limitation by having a
non-grantor trust place in service an oth-
erwise qualifying vehicle, suggesting that
an anti-abuse rule would prevent such
occurrences. In response to this comment,
the final regulations provide that the Mod-
ified AGI limitation applies to individuals,
estates, and non-grantor trusts. For estates
and non-grantor trusts, Modified AGI is
AGI as determined under section 67(e) of
the Code. The final regulations also pro-
vide that the $150,000 threshold amount
applies to estates and non-grantor trusts
for purposes of the Modified AGI limita-
tion, and that an estate or non-grantor trust
will be treated as having Modified AGI
above the threshold amount for any year
in which it is not in existence. The Trea-
sury Department and the IRS will also
continue to monitor this issue. In further
response to this comment, the final regu-
lations also clarify the applicability of this
credit to grantor trusts, and provide that,
to the extent that the grantor or another
person is treated as owning all or part of
a trust under sections 671 through 679 of
the Code, the section 30D credit is allo-
cated to such grantor or other person in
accordance with §1.671-3(a)(1). In addi-
tion, the Modified AGI limitation applies
based on the Modified AGI of the grantor
or other deemed owner, not the Modified
AGI of the trust or any other beneficiary.
The final regulations also clarify that
with regard to partnerships and S cor-
porations, the Modified AGI limitation
applies on a partner or shareholder level.
Finally, consistent with the preceding, the
final regulations provide that the Modified
AGI limitation does not apply to corpora-
tions and taxpayers other than individuals,
estates, trusts, and partners or sharehold-
ers of passthrough entities.
D. FEOC restriction
Section 30D(d)(7), the excluded enti-
ties provision or FEOC Restriction,
excludes from the definition of “new clean
vehicle” any vehicle placed in service
after December 31, 2024, with respect to
which any of the applicable critical miner-
als contained in the battery of such vehi-
cle (as described in section 30D(e)(1)(A))
were extracted, processed, or recycled by
a FEOC (as defined in section 40207(a)
(5) of the Infrastructure Investment and
Jobs Act), or any vehicle placed in service
after December 31, 2023, with respect to
which any of the components contained in
the battery of such vehicle (as described in
section 30D(e)(2)(A)) were manufactured
or assembled by a FEOC (as so defined).
Several commenters either criticized
the FEOC Restriction or requested that
these applicability dates be delayed in
order to give the industry time to recon-
figure their supply chains. Similarly, com-
menters noted that the FEOC Restriction
may be problematic for land-based sourc-
ing of nickel, cobalt, and manganese in
particular. As the FEOC Restriction and
its applicability dates are statutory, the
final regulations do not adopt these com-
ments.
Proposed §1.30D-6(a) provided defi-
nitions for terms relevant to the FEOC
Restriction and proposed §1.30D-6. The
final regulation moves these definitions to
§1.30D-2(b), and include a new §1.30D-
6(a) that is a general statement of the
FEOC Restriction rules. Otherwise, the
final regulations adopt the structure and
framework of proposed §1.30D-6, with
the modifications described herein.
1. Due Diligence and Transition Rule for
Non-traceable Battery Materials
Proposed §1.30D-6(b) provided due
diligence requirements for qualified man-
ufacturers to determine compliance with
the FEOC Restriction. Proposed §1.30D-
6(b)(2) provided a temporary exception to
the due diligence requirements for identi-
fied non-traceable battery materials.
i. Due diligence
Proposed §1.30D-6(b)(1) provided that
the qualified manufacturer must conduct
due diligence with respect to all battery
components and applicable critical min-
erals (and associated constituent mate-
rials) that are relevant to determining
whether such components or minerals are
FEOC-compliant. This due diligence must
comply with standards of tracing for bat-
tery materials available in the industry at
the time of the attestation or certification
that enable the qualified manufacturer to
know with reasonable certainty the prove-
nance of applicable critical minerals, con-
stituent materials, and battery components.
As noted in the Explanation of Provisions
to the December Proposed Regulations,
such tracing standards may include inter-
national battery passport certifications and
enhanced battery material and component
tracking and labeling. Proposed §1.30D-
6(b)(1) specified that reasonable reliance
on a supplier attestation or certification
will be considered due diligence if the
qualified manufacturer does not know or
have reason to know after due diligence
that such supplier attestation or certifica-
tion is incorrect.
The due diligence must be conducted
by the qualified manufacturer prior to its
determination of any information to estab-
lish a compliant-battery ledger described
in proposed §1.30D-6(d), and on an
ongoing basis. A battery is not consid-
ered FEOC-compliant unless the qualified
manufacturer has conducted such due dili-
gence with respect to all such components

Bulletin No. 2024–22 1279 May 28, 2024
and applicable critical minerals of the bat-
tery and provided required attestations or
certifications described in section III.D. of
this Summary of Comments and Explana-
tion of Revisions.
The Treasury Department and the IRS
received a number of comments relating
to the due diligence requirement.
As noted previously, proposed §1.30D-
6(b)(1) provided that due diligence must
comply with standards of tracing for bat-
tery materials available in the industry at
the time of the attestation or certification.
The proposed regulations did not specify
a tracing system. Several commenters
requested that the final regulations create
an industry standard for due diligence to
avoid confusion and provide a standard-
ized system. One such commenter sug-
gested that the Catena-X battery passport,
used in Europe, as a model while another
commenter recommended against adopt-
ing such rules because the commenter
considered them to be burdensome and
largely untested. Another commenter sug-
gested defining “due diligence” according
to certain OECD standards. That same
commenter suggested requiring use of
digital battery identifiers (that is, battery
passports). Another commenter suggested
that until mineral supply chain tracing
becomes standardized, voluntary stan-
dards using multi-stakeholder governance
with independent, publicly available,
third-party auditing (such as the Initiative
for Responsible Mining Assurance’s stan-
dard), can assist. Finally, one commenter
expressed a desire to better understand
expectations for supply chain tracing and
offered to assist the Treasury Department
and qualified manufacturers in implement-
ing effective traceability mechanisms.
The Treasury Department and the IRS
appreciate the number of comments about
due diligence. However, the broad range
of perspectives offered by the comment-
ers counsels against mandating a universal
standard at this time. The Treasury Depart-
ment and the IRS will continue to monitor
industry standards, battery passports, and
other methodologies for tracing, and will
consider this issue for future guidance.
The Treasury Department and the IRS
also received comments with respect
to the due diligence requirements and
upstream suppliers of the OEMs. One
commenter requested that the final reg-
ulations require battery manufacturers
and suppliers of battery components and
applicable critical minerals to cooperate
and provide information to qualified man-
ufacturers. Alternatively, the commenter
requested that battery manufacturers be
required to directly submit information
to the IRS and provide qualified manu-
facturers with certification that any items
are FEOC-compliant. Section 30D does
not provide authority to require submis-
sions by upstream suppliers, either to
the qualified manufacturer or to the IRS.
Section 30D(d)(3) authorizes information
reporting to the Secretary regarding new
clean vehicles only by qualified manufac-
turers. Qualified manufacturers may seek
to incorporate reporting and assurances
by their battery suppliers as part of their
supply contracts, but such an arrangement
would be outside the scope of these regu-
lations. Accordingly, the final regulations
do not adopt this comment.
Two commenters raised issues with
respect to battery supplier reliance on
further upstream suppliers. Proposed
§1.30D-6(b)(1) specified that reasonable
reliance on a supplier attestation or certifi-
cation will be considered due diligence if
the qualified manufacturer does not know
or have reason to know after due diligence
that such supplier attestation or certifi-
cation is incorrect. The two commenters
requested that the reasonable reliance rule
be extended to third-party manufacturers
or suppliers who conduct due diligence
under proposed §1.30D-6(c)(5). The Trea-
sury Department and the IRS agree with
these commenters. Accordingly, the final
regulations also specify that that reason-
able reliance on a supplier attestation or
certification will also be considered due
diligence if the third-party manufacturer
or supplier (described in §1.30D-6(c)(5))
does not know or have reason to know
after due diligence that such supplier
attestation or certification is incorrect.
One commenter stated that additional
clarification is needed to identify the
elements of reasonable reliance and due
diligence beyond the attestation of the
supplier. For instance, suppliers may,
in certain circumstances, be reluctant
to share certain sourcing information as
proprietary and competitive in nature.
The commenter asked whether a supplier
statement based on undisclosed infor-
mation could be reasonably relied upon.
In addition, the commenter sought more
information about implications of a quali-
fied manufacturer’s reasonable reliance on
supplier attestations that prove later to be
inaccurate, such as whether the qualified
manufacturer’s reasonable reliance would
act as a shield against a penalty. Another
commenter suggested that Treasury should
consider establishing a process for certi-
fying that suppliers are not FEOCs. The
commenter posited that such a process
could mirror existing U.S. government
certification, accreditation, or registration
processes, such as International Traffic in
Arms Regulations (ITAR) registration or
National Institute of Standards and Tech-
nologies (NIST) certification.
The Treasury Department and the
IRS appreciate the commenters’ desire
for certainty regarding the procedures
for establishing reasonable reliance and
due diligence. As described in proposed
§1.30D-6(f), the IRS will consider a range
of remedial options in the event of inac-
curate attestations, certification, or docu-
mentation, and the IRS will exercise dis-
cretion in pursuing any of the specified
options on the basis of the unique facts
and circumstances of the inaccuracy,
including reasonable reliance on supplier
information. In addition, parties to supply
contracts may include a provision for such
attestations as part of their contracts.
ii. Transition rule for impracticable-to
trace-battery materials
Proposed §1.30D-6(b)(2) provided that
for any new clean vehicles for which the
qualified manufacturer provides a periodic
written report before January 1, 2027, the
due diligence requirement may be satisfied
by excluding identified non-traceable bat-
tery materials (and associated constituent
materials). In addition, proposed §1.30D-
6(c)(2) provided that identified non-trace-
able battery materials (and associated con-
stituent materials) may be excluded from
the determination of whether a battery cell
is FEOC-compliant. To use these transi-
tion rules, qualified manufacturers must
submit a report during the up-front review
process (described in section III.B.3 of
this Summary of Comments and Explana-
tion of Revisions) demonstrating how the
qualified manufacturer will comply with

May 28, 2024 1280 Bulletin No. 2024–22
the excluded entity restrictions once the
transition rule is no longer in effect and
once all materials must be fully traced
through the entire electric vehicle battery
supply chain.
Proposed §1.30D-6(a)(13)(i) defined
“non-traceable battery materials” to mean
specifically identified low-value battery
materials that may originate from multiple
sources and are often commingled during
refining, processing, or other production
processes by suppliers to such a degree
that the qualified manufacturer cannot,
due to current industry practice, feasibly
determine and attest to the origin of such
battery materials. For this purpose, low-
value battery materials are those that have
low value compared to the total value of
the battery. Proposed §1.30D-6(a)(13)(ii)
was reserved to contain the specific list of
identified non-traceable battery materials.
While proposed §1.30D-6(a)(13)(ii) was
reserved, the Explanation of Provisions to
the December Proposed Regulations iden-
tified as exemplar materials, for potential
inclusion on the list, applicable critical
minerals contained in electrolyte salts,
electrode binders, and electrolyte addi-
tives.
As noted in section III.A. of this Sum-
mary of Comments and Explanation of
Revisions, consistent with the expectation
and requirement that OEMs will develop
tracing processes in the future, the final
regulations retain the list but change the
name to “impracticable-to-trace battery
materials,” in order to better describe the
rationale underlying the list.
The Treasury Department and the IRS
received many comments with respect to
the list of identified nontraceable battery
materials as well as the proposed transi-
tion rules.
Several commenters requested changes
to the meaning of “low value.”
8
One
commenter requested that low value be
determined by reference to the battery
as a whole, and not just the total value
of applicable critical minerals. Similarly,
another commenter requested that “low
value” be defined with respect to a spec-
ified percentage relative to the value of
the battery. Several commenters requested
that “low value” be defined as less than 5
percent or 10 percent of the value of the
battery. However, another commenter pro-
posed that “low value” be defined as less
than 5 percent of the total value of the crit-
ical minerals in the batteries. Finally, one
commenter objected to a definition based
on value, noting that, apart from certain
cathode materials, the economic value
of every other component in lithium ion
batteries is low relative to the total value
of the battery. The final regulations do not
adopt these comments, as the determina-
tion of low-value is not an operative rule
with respect to the impracticable-to-trace
battery materials list. Instead, the Expla-
nation of Provisions to the December
Proposed Regulations only noted the
low-value of certain materials, relative to
the value of the clean vehicle battery, for
the purpose of identifying materials that
qualified manufacturers could not feasi-
bly trace. However, the as noted in this
Summary of Comments and Explanation
of Revisions, the term “low-value” is not
defined as a specific percentage. Instead,
a low-value battery material is one for
which qualified manufacturers have not
historically conducted due diligence or
tracing, due to its relatively low value in
relation to either the battery or the applica-
ble critical minerals in the battery.
Several commenters supported the
development of a specific list of nontrace-
able battery materials as this would pro-
vide the greatest clarity and certainty for
the supply chain. Several commenters also
requested a full enumerated list of materi-
als. Many commenters requested certainty
as soon as possible. Several commenters
requested that the non-traceable battery
materials rule be made permanent. On
the other hand, several commenters sup-
ported the transition rule for non-trace-
able battery materials, agreed with the
temporary nature of the rule, and were in
favor of this approach over other alterna-
tives, such as a de minimis rule or set of
criteria for exclusion. Many commenters
agreed with the exemplar materials iden-
tified in the Explanation of Provisions to
the December Proposed Regulations (that
is, applicable critical minerals contained
in electrolyte salts, electrode binders, and
electrolyte additives). A few commenters
suggested clarification regarding other
materials. One commenter requested that
the final rule exclude low value anode
materials from the tracing requirements.
Some commenters requested that applica-
ble critical minerals contained in foils be
added to the list. Other commenters rec-
ommended that low-value materials, com-
prising less than five or ten percent of the
value of all critical minerals in a battery,
be excluded from sourcing requirements
under any final rule and specifically lists
cobalt, zinc, tungsten, yttrium, titanium,
graphite, and fluorspar as potential low-
value materials. Finally, one commenter
requested that constituent materials be
added to the list. That commenter gave the
specific example of the electrolyte, and
noted that the battery manufacturer may
have difficulty conducting due diligence
with respect to electrolytes, due to the
tiers of upstream suppliers as well as the
need to request confidential commercial
information.
Other commenters noted that cer-
tain minerals or materials should not be
included in the definition of non-traceable
battery materials. One commenter noted
that consultation with industry is needed
to develop a list, because many materials
either can be traceable or will be trace-
able before 2027. Several commenters
took issue with the exemplar materials
identified in the Explanation of Provi-
sions to the April Proposed Regulations.
Some commenters disputed the idea that
applicable critical minerals contained
in electrolyte salts and electrode binders
are non-traceable. One commenter noted
that special electrolyte salts and additives
(SESAs) are never commingled during
transport or usage and may be traced to
the source through a certification of ori-
gin. Other commenters specifically enu-
merated minerals that they asserted were
traceable, including magnesium, magne-
sium sulfate, manganese sulphate mono-
hydrate and related manganese materials
and manganese oxides; fluorspar, fluor-
spar-based hydrofluoric acid, fluorine
compounds, polyvinylidene fluoride
8
The Explanation of Provisions to the December Proposed Regulations noted that, where battery materials make up only a very small percentage of the value of the battery as a whole, many
industry participants had little reason to trace the source of these materials prior to the passage of the IRA. On the other hand, that Explanation of Provisions identified exemplar materials that
accounted for less than two percent of the value of applicable critical minerals in the battery.

Bulletin No. 2024–22 1281 May 28, 2024
(PVDF) and PVDF binder technology;
rare earth elements; lithium and Lithium
hexafluorophosphate (LiPF6); cobalt; and
nickel. Finally, one commenter suggested
that the list of non-traceable battery mate-
rials only include non-essential battery
materials that have ready substitutes. The
commenter contrasted those materials
with essential battery materials (such as
fluorinated salts and fluorinated binders)
that are essential to making an EV battery
and have no meaningful substitutes. The
commenter recommended that such essen-
tial battery materials not be added to the
nontraceable battery materials list.
Several comments raised questions
relating to the justifications for the iden-
tified non-traceable battery materials list.
One commenter, while generally support-
ive of the proposed rules, stated that all
materials are in fact able to be traced.
Finally, several commenters suggested
that the final regulations adopt a different
approach for a transition rule. One com-
menter requested that the final regulations
provide a detailed list of low-value and
non-traceable battery materials that form
part of constituent materials, so that bat-
tery manufacturers do not have to trace
materials to specific upstream suppliers.
Another commenter proposed establish-
ing a dynamic list of non-traceable battery
materials rather than a static list. Sev-
eral commenters also suggested that the
final regulations provide a list of criteria
for manufacturers to apply to determine
what materials are excludible. Similarly,
several commenters recommended that
the final regulations adopt a de minimis
threshold, with some suggesting a five
percent threshold and others a ten per-
cent threshold. One commenter requested
that the Treasury Department and the IRS
remove the non-traceable battery materi-
als transition rule and replace it with an
exemption from due diligence for battery
materials produced by DOE Office of
Manufacturing Energy and Supply Chains
battery grant awardees. Finally, one com-
menter requested a three- to four-year
grace period for certain applicable critical
minerals, such as graphite and powders of
cathode active materials.
Balancing all of the varying and oppos-
ing considerations reflected in these com-
ments, the final regulations do not adopt a
de minimis percentage threshold. The stat-
ute does not provide guidance for deter-
mining a numerical de minimis percent-
age. Instead, the statute compels qualified
manufacturers to conduct due diligence
in order to determine that vehicles satisfy
the FEOC Restriction. The final transi-
tion rule requires due diligence in light of
existing tracing capabilities and the prac-
ticalities of mineral and battery compo-
nent supply chains, such as the presence
of commingling. Instead of adopting a
numerical de minimis percentage, the final
regulations retain the proposed list and
the related transition rules from the pro-
posed regulations, but generally include
only the exemplar materials identified in
the Explanation of Provisions to the April
Proposed Regulations.
In addition, however, graphite con-
tained in anode materials is added to the
list of impracticable-to-trace battery mate-
rials. Several commenters raised issues
relating to graphite. Many commenters
that supported the transition rule also gen-
erally supported including graphite on the
list. One commenter noted that graphite
accounts for only 3 to 4 percent of EV
battery value, and that it is especially dif-
ficult to trace because battery cell man-
ufacturers frequently mix synthetic and
natural graphite together. Another com-
menter requested clarification of whether
the FEOC analysis for synthetic graphite
(1) begins with the petroleum coke from
which synthetic graphite is derived or,
instead, (2) goes all the way upstream to
the oil extraction. This commenter noted
that, in the latter case, tracing would not
be possible. However, a different com-
menter stated that the “battery coke” used
by the EV industry to make synthetic
graphite is not produced from a nontrace-
able supply chain, and that such battery
coke (unlike commodity cokes) is not
commingled prior to shipment to an end
user. Taking these comments under con-
sideration, the Treasury Department and
the IRS have determined that, due to the
commingling of natural and synthetic
graphite, as well as the difficulty of trac-
ing synthetic graphite fully upstream,
graphite contained in anode materials is
an impracticable-to-trace material. Con-
sequently, the final regulations include
graphite contained in anode materials on
the list of identified impracticable-to-trace
battery materials.
The final regulations add a definition
of “impracticable-to-trace battery materi-
als” to §1.30D-2(b), and specify identified
impracticable-to-trace battery materials
as applicable critical minerals in the fol-
lowing circumstances: graphite contained
in anode materials and applicable critical
minerals contained in electrolyte salts,
electrode binders, and electrolyte addi-
tives. Section 1.30D-6(b)(2) provides that
for any new clean vehicles for which the
qualified manufacturer provides a periodic
written report before January 1, 2027,
the due diligence requirement may be
satisfied by excluding identified imprac-
ticable-to-trace battery materials (and
associated constituent materials). Section
§1.30D-6(c)(3)(iii) provides that identi-
fied impracticable-to-trace battery materi-
als (and associated constituent materials)
may be excluded from the determination
of whether a battery cell is FEOC-compli-
ant.
In addition, the proposed regulations
provided that, to use these transition rules,
qualified manufacturers must submit a
report during the up-front review process
demonstrating how the qualified manufac-
turer will comply with the FEOC Restric-
tion once the transition rules end. The final
regulations keep this requirement and fur-
ther clarify that this report must include
information about efforts made to date to
secure a FEOC-compliant battery supply
once the transition rule is no longer in
effect. Additional requirements related to
this report will be described in guidance
published in the Internal Revenue Bulletin
(see §601.601 of this chapter). The Trea-
sury Department and the IRS anticipate
that such requirements will include robust
documentation of efforts made to date
to secure FEOC-compliant battery sup-
ply, such as potential suppliers engaged,
offtake agreements, and contracts entered
into with domestic or compliant suppliers.
Finally, the Treasury Department and the
IRS note that the inclusion of materials on
the impracticable-to-trace battery materi-
als list does not relieve any person from
compliance obligations with respect to
any other laws or requirements of other
federal agencies or international organiza-
tions, including U.S. sanctions law admin-
istered by the Treasury Department’s
Office of Foreign Assets Control (OFAC)
(31 CFR Chapter V).

May 28, 2024 1282 Bulletin No. 2024–22
2. FEOC Compliance
Proposed §1.30D-6(c) provided the
rules for determining whether battery
components, battery cells, and applica-
ble critical minerals (and associated con-
stituent materials) are FEOC-compliant.
These rules generally required the phys-
ical tracking of applicable critical miner-
als, battery cells, and battery components.
However, proposed §1.30D-6(c)(3)(ii)
(A) provided that the determination that a
battery cell is a FEOC-compliant battery
cell may be made through an allocation
of the available mass of applicable criti-
cal minerals and associated constituent
materials to specific battery cells man-
ufactured or assembled in a battery cell
production facility, without the physical
tracking of the mass of applicable critical
minerals (and associated constituent mate-
rials) to specific battery cells. This alloca-
tion-based determination was an exception
to the general rule, which required specific
tracking. Proposed §1.30D-6(c)(3)(ii)(F)
provided that the allocation-based excep-
tion would be a temporary rule for any
new clean vehicle for which the qualified
manufacturer provides a periodic written
report before January 1, 2027.
In the Explanation of Provisions to the
December Proposed Regulations the Trea-
sury Department and the IRS requested
comments on whether industry practices
are likely to develop that allow for phys-
ical tracking before December 31, 2032,
and, if not, whether the allocation-based
determination should be included as a per-
manent compliance approach rather than
as a temporary transition rule.
In response, several commenters
expressed appreciation for the alloca-
tion-based determination. Commenters
also requested that the rule be made perma-
nent, due to the inability to quickly modify
supply chains and the impracticability or
impossibility of physically tracing appli-
cable critical minerals. One commenter
appreciated the inclusion of the transition
rule in allowing allocation-based determi-
nations for critical minerals and constitu-
ent materials, as well as the transition rule
regarding non-traceable materials. One
commenter noted that the time frame for
the temporary allocation-based approach
(ending December 31, 2026) is very short
and was not sure it would be sufficient for
manufacturers to alter their supply chains,
as needed. The commenter further recom-
mended that the proposed transition rule
for allocation-based accounting be made
permanent for the duration of the sec-
tion 30D tax credit. In response to these
comments, these final regulations make
the allocation-based determination a per-
manent rule. Informed by the consensus
view from the comments and consultation
with the DOE, the Treasury Department
and the IRS recognize that it may be dif-
ficult to de-commingle supply chains by
2027. In addition, it would be difficult and
impracticable to track individual masses
of applicable critical minerals through
the supply chain in order to determine
which masses are FEOC-compliant and
which are not. Moreover, allocation-based
accounting is consistent with the pur-
poses of the statute, because it encourages
OEMs and their suppliers to ensure secure
supply chains; under an allocation-based
accounting rule, the number of new clean
vehicles that OEMs are able to produce is
limited by the supply of the lowest-quan-
tity FEOC-compliant critical mineral.
In addition, several commenters
requested changes to the calculation-based
methodology under the allocation-based
accounting rule. Two commenters
requested that the allocation be of total
aggregated mass of FEOC-compliant
applicable critical minerals, rather than
limiting the FEOC-compliant battery cells
to the critical mineral that has the lowest
percentage of FEOC-compliant supply.
The Treasury Department and the IRS
disagree with these comments. Under the
total aggregated mass approach suggested
by the commenters, a qualified manu-
facturer with 0 percent FEOC-compli-
ant mass of a specific applicable critical
mineral would still have FEOC-compli-
ant batteries based on the total mass of
FEOC-compliant applicable critical min-
erals. This result would be inconsistent
with the purposes of section 30D(d)(7).
Accordingly, the final regulations do not
adopt these comments.
Two commenters recommended that
the final regulations adopt a mass bal-
ance approach with respect to allocated
accounting. A full mass balance approach
would require full physical tracing across
long procurement chains for arrays of
materials into the battery materials pro-
duction. Given concerns with the ability
of manufacturers to implement a robust
tracking process in the near term to this
level of specificity, the final regulations do
not adopt this approach.
Proposed §1.30D-6(c)(3)(iii) provided
that for new clean vehicles for which
the qualified manufacturer provides a
periodic written report before January 1,
2027, the determination of whether a bat-
tery cell is FEOC-compliant under pro-
posed §1.30D-6(c)(3) may be satisfied by
excluding non-traceable battery materials,
and their associated constituent materials.
As described in section III.D.1.ii. of this
Summary of Comments and Explanation
of Revisions, this rule is finalized with
respect to identified impracticable-to-trace
battery materials.
3. Compliant-battery ledger
Proposed §1.30D-6(d)(1) provided that
for new clean vehicles placed in service
after December 31, 2024, the qualified
manufacturer must determine and pro-
vide information to the IRS to establish a
compliant-battery ledger for each calendar
year, as described in proposed §1.30D-
6(d)(2)(i) and (ii). One compliant-battery
ledger may be established for all vehicles
for a calendar year, or there may be sepa-
rate ledgers for specific models or classes
of vehicles.
The Treasury Department and the IRS
received several comments with respect to
the compliant-battery ledger.
Several commenters noted that the
upfront review process is both novel
and complicated, and will require con-
tinued conversation between OEMs and
the Treasury Department and the IRS.
One such commenter commended the
Treasury Department and the IRS’s will-
ingness to engage with manufacturers
to support compliance and also asked
for sufficient advance notice to quali-
fied manufacturers regarding the upfront
review process. Another noted that the
process of establishing the mechanisms
of the compliant-battery ledger will
be an iterative process. In response to
this, the Treasury Department and the
IRS note that they intend to continue to
engage with OEMs and other stakehold-
ers to develop the rules under the upfront
review process.

Bulletin No. 2024–22 1283 May 28, 2024
One commenter requested further clar-
ification on the administrative procedures
and necessary documentation require-
ments on areas such as FEOC-compliant
certification and compliant-battery ledger.
In response, the Treasury Department and
the IRS generally note that initial guid-
ance with respect to the upfront review
process was issued in Revenue Procedure
2023-38.
Section 5.08 of Revenue Procedure
2023-38 requires qualified manufacturers
to report any decrease to the ledger within
30-days of discovery. One commenter
requested that this 30-day time period be
extended. Although the comment is out-
side the scope of these final regulations,
the Treasury Department and the IRS note
that they will continue to study how best
to administer the rules for establishing and
updating compliant-battery ledgers.
One commenter raised a concern that
the compliant-battery ledger may allow
for noncompliance because batteries need
not be tracked to specific vehicles. Pro-
posed §1.30D-6(c)(1) requires the phys-
ical tracking of batteries to specific new
clean vehicles via serial number or other
identification system. Therefore, the com-
menter’s concern is already addressed.
Finally, two commenters requested
additional mechanisms for the upfront
review process. First, one commenter
requested that the Treasury Department
and the IRS create a safe harbor system
through which sourcing plans and licens-
ing agreements of a proposed transaction
are submitted for review and clearance.
This commenter suggested that the Trea-
sury Department’s Committee on Foreign
Investment in the United States process
could provide a model. Second, several
commenters noted that OEMs may have
difficulty verifying information due to
confidentiality obligations as well as the
lack of harmonization among suppliers,
and proposed that the Treasury Depart-
ment and the IRS create an online portal
to allow OEMs and suppliers to match
information. The Treasury Department
and the IRS intend that the upfront review
process will be an iterative process in
which attestations, certifications, and
documentation regarding the section 30D
sourcing requirements are submitted for
review to the IRS, with analytical assis-
tance from the DOE. This process allows
for additional information to be requested
of and supplied by qualified manufactur-
ers. In addition, qualified manufacturers
may rely on determinations provided by
third-party manufacturers or suppliers,
provided the requirements in §1.30D-6(c)
(5) are met.
4. Rule for New Qualified Fuel Cell
Motor Vehicles
The final regulations add §1.30D-
6(g) to clarify that the FEOC Restriction
does not apply to new qualified fuel cell
motor vehicles. However, a qualified fuel
cell motor vehicle (as defined in section
30B(b)(3)) with a clean vehicle battery,
such as a plug-in hybrid fuel cell electric
vehicle, would be subject to the FEOC
Restriction.
Because new qualified fuel cell motor
vehicles do not contain clean vehicle bat-
teries, these vehicles do not have appli-
cable critical minerals or battery compo-
nents contained in such battery that would
subject the vehicles to the FEOC Restric-
tion. Thus, the rule regarding new quali-
fied fuel cell vehicles flows naturally from
the statute.
IV. Section 6213(g)(2)
The IRA added three new definitions
to the exclusive list of “mathematical or
clerical errors” in section 6213(g)(2).
These new definitions are set out in sec-
tions 6213(g)(2)(T), (U), and (V). Sec-
tion 6213(g)(2)(T) provides that the term
“mathematical or clerical error” means
an omission of a correct VIN required
under section 30D(f)(9) (relating to
the credit for new clean vehicles) to be
included on a return; section 6213(g)(2)
(U) provides that the term “mathemati-
cal or clerical error” means an omission
of a correct VIN required under section
25E(d) (relating to the credit for pre-
viously-owned clean vehicles) to be
included on a return; and section 6213(g)
(2)(V) provides that the term “mathemat-
ical or clerical error” means an omission
of a correct VIN required under section
45W(e) (relating to the credit for qual-
ified commercial clean vehicles) to be
included on a return.
The flush language added in 1998 to
the end of section 6213(g)(2) regarding
whether a taxpayer is treated as having
omitted a correct taxpayer identification
number does not provide the clarification
that is necessary to determine the meaning
of “an omission of a correct vehicle iden-
tification number” under sections 6213(g)
(2)(T) through (V). Accordingly, proposed
§301.6213-2 provided rules for determin-
ing whether the IRS is authorized to use
math error authority to make a summary
assessment if there has been an “omission
of a correct vehicle identification number”
on a taxpayer’s return on which the tax-
payer is claiming or electing to transfer
the credits under sections 30D, 25E and
45W.
A comment recommended that the
proposed regulation be modified to clar-
ify how it applies to taxpayers who rely
on a seller report containing mistakenly
entered VINs, or taxpayers who rely on
manufacturers’ incorrect determinations
that a vehicle is eligible for the section
25E or 30D credit if the vehicle is in fact
ineligible for either credit.
Vehicle sellers can prevent the situation
described by the commenter by submitting
the seller report described in §§1.25E-1(b)
(19) and §1.30D-2(b)(48), which must be
submitted electronically by the seller to
the IRS at the time of sale. The reported
VIN’s eligibility is checked against qual-
ified manufacturer reporting to the IRS at
the time of submission of the seller report.
The taxpayer then receives a copy of the
seller report only after VIN eligibility is
verified through the seller reporting pro-
cess in real time. Accordingly, the seller
report should not contain an incorrect VIN
or VIN for a vehicle that was ineligible for
a clean vehicle credit. Vehicle sellers are
advised to ensure they accurately enter
the VIN of the clean vehicle the taxpayer
is purchasing when submitting the seller
report and to be cautious in finalizing
transactions in any case in which a VIN’s
eligibility has not been confirmed by the
IRS through an electronically submitted
seller report. Taxpayers should also ensure
that the VIN listed on their seller report
matches the VIN of the clean vehicle actu-
ally purchased. In addition, the taxpayer
can rely on the information and certifica-
tions contained in the qualified manufac-
turer written reports for the sections 25E
and 30D credits pursuant to §§1.25E-2(h)
and 1.30D-4(h).

May 28, 2024 1284 Bulletin No. 2024–22
V. Applicability Dates
The final rules modify the applicability
dates of the proposed rules for uniformity
and administrability across the various
rules included in the April, October, and
December Proposed Regulations. Consis-
tent with the authority in section 7805(b)
(1), the applicability dates generally are
modified to apply to taxable years end-
ing after the latest publication date of the
proposed regulations to which the section
relates. Accordingly, the section 25E final
regulations generally apply to taxable
years ending after October 10, 2023, and
the section 30D final regulations gener-
ally apply to taxable years ending after
December 4, 2023.
The regulatory applicability dates also
align with certain statutory applicability
dates. For example, the rules regarding
transfer of the section 25E and 30D credits
in §§1.25E-3 and 1.30D-5 apply to clean
vehicles placed in service after December
31, 2023, in taxable years ending after
December 31, 2023, to reflect the statu-
tory applicability date of vehicles acquired
(section 25E) or placed in service (section
30D) after December 31, 2023. Similarly,
the rules related to the FEOC Restriction
in §1.30D-6 reflect the statutory applica-
bility date of vehicles placed in service
after December 31, 2023.
Special Analyses
I. Regulatory Planning and Review
Pursuant to the Memorandum of
Agreement, Review of Treasury Regula-
tions under Executive Order 12866 (June
9, 2023), tax regulatory actions issued by
the IRS are not subject to the requirements
of section 6 of Executive Order 12866, as
amended. Therefore, a regulatory impact
assessment is not required.
II. 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 informa-
tion from the public, whether such collec-
tion of information is mandatory, voluntary,
or required to obtain or retain a benefit.
Any collection burden associated with
rules described in these final regulations
is previously accounted for in OMB Con-
trol Number 1545-2137. These final regu-
lations do not alter previously accounted
for information collection requirements
and do not create new collection require-
ments. OMB Control Number 1545-2137
covers Form 8936 and Form 8936-A
regarding electric vehicle credits, includ-
ing the new requirement 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 requirements for qualified
manufacturers to make periodic written
reports to the Secretary to provide infor-
mation related to each vehicle manufac-
tured by such manufacturer that is eligible
for the section 30D credit as required in
section 30D(d)(3), including the critical
mineral and battery component certifica-
tion requirements in sections 30D(e)(1)
(A) and (e)(2)(A). In addition, Revenue
Procedure 2022-42 provides the proce-
dures for sellers of new clean vehicles
to report information required by section
30D(d)(1)(H) for vehicles to be eligible
for the section 30D credit. The collections
of information contained in Revenue Pro-
cedure 2022-42 are described in that doc-
ument and were submitted to the Office of
Management and Budget in accordance
with the Paperwork Reduction Act under
control number 1545-2137.
The requirement to determine the final
assembly location as defined in §1.30D-
2(b) by relying on (1) the vehicle’s plant
of manufacture as reported in the VIN
pursuant to 49 CFR 565 or (2) the final
assembly point reported on the label
affixed to the vehicle as described in 49
CFR 583.5(a)(3) is accounted for by the
Department of Transportation in OMB
Control Numbers 2127-0510 and 2127-
0573.
For purposes of the PRA, the report-
ing burden associated with the collection
of information in §§1.25E-3 and 1.30D-5
regarding credit transfer elections will be
reflected in the PRA Submissions asso-
ciated with Revenue Procedure 2023-33.
The OMB control number for Revenue
Procedure 2023-33 is 1545-2311.
A Federal agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a valid control number
assigned by the Office of Management
and Budget.
III. 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 a final regulatory flexibility analy-
sis (FRFA) of the proposed rule.
In connection with the April and
December Proposed Regulations, the Sec-
retary certified that these proposed regula-
tions will not have a significant economic
impact on a substantial number of small
entities.
April Proposed Regulations: The reg-
ulations proposed in April affect two
types of business entities: (1) qualified
manufacturers that must trace and report
on their critical minerals and battery com-
ponents in order to certify that their new
clean vehicles qualify for the section 30D
credit, and (2) businesses that may earn
the section 30D credit when purchasing
and placing in service a new clean vehicle.
While the tracking and reporting of
critical minerals and battery components
is likely to involve significant adminis-
trative costs, according to public filings,
all qualified manufacturers had total rev-
enues above $1 billion in 2022. There
are a total of 13 qualified manufacturers
that have indicated that they manufacture
vehicles currently eligible for the section
30D credit.
Qualified manufacturers also have to
certify that their vehicles qualify under the
Critical Minerals and Battery Components
Requirements. The regulations provide
definitions and general rules for the sec-
tion 30D credit, including rules for qual-
ified manufacturers to comply with the
Critical Minerals and Battery Components
Requirements. The Treasury Department

Bulletin No. 2024–22 1285 May 28, 2024
and the IRS intend that the rules provide
clarity for qualified manufacturers for
consistent application of critical miner-
als and battery components calculations
and for taxpayers purchasing new clean
vehicles that qualify for the section 30D
credit. The Treasury Department and the
IRS have determined that qualified manu-
facturers do not meet the applicable defi-
nition of small entity.
Business purchasers of clean vehicles
who take the section 30D credit must
satisfy reporting requirements that are
largely the same as those faced by indi-
viduals accessing the section 30D credit
to purchase clean vehicles. Taxpayers will
continue to file Form 8936, Clean Vehicle
Credit, to claim the section 30D credit. As
was the case for the section 30D credit prior
to amendments made by the IRA, taxpay-
ers can rely on qualified manufacturers to
determine if the vehicle being purchased
qualifies for the section 30D credit and the
credit amount. The estimated burden for
individual and business taxpayers filing
this form is approved under OMB control
number 1545–0074 and 1545–0123. To
make it easier for a taxpayer to determine
the potential section 30D credit available
for a specific vehicle, the regulations pro-
vide business entities with tools and defi-
nitions to ascertain whether any vehicles
purchased would be eligible for the credit.
The VIN reporting required by section
30D(f)(9) and described in the proposed
regulations was included in prior section
30D reporting.
December Proposed Regulations: The
regulations proposed in December affect
qualified manufacturers that must deter-
mine their compliance with the FEOC
Restriction in order to certify that their
new clean vehicles placed in service after
December 31, 2023, qualify for the sec-
tion 30D credit.
While the tracking and reporting of
compliance with the FEOC Restriction is
likely to involve significant administrative
costs, according to public filings, every
qualified manufacturer had total revenues
above $1 billion in 2022. There are a total
of 13 qualified manufacturers that have
indicated that they manufacture vehicles
currently eligible for the section 30D
credit. Qualified manufacturers also have
to certify that their vehicles comply with
the FEOC Restriction and contain batter-
ies that are FEOC-compliant. The reg-
ulations provide definitions and general
rules for this purposes. Accordingly, the
Treasury Department and the IRS intend
that the rules provide clarity for qualified
manufacturers for consistent application
of the FEOC Restriction. The Treasury
Department and the IRS have determined
that qualified manufacturers do not meet
the applicable definition of small entity.
For these reasons, it is hereby certified
that §§1.30D-1, 1.30D-3, 1.30D-4(a)-(e)
and 1.30D-6, and the accompanying defi-
nitions in §1.30D-2 that were proposed in
the April and December Proposed Regula-
tions, do not have a significant economic
impact on a substantial number of small
entities.
In connection with the October Pro-
posed Regulations, the Treasury Depart-
ment and the IRS presented an IRFA to
invite comments on both the number of
entities affected and the economic impact
on small entities. No comments were
received specific to these areas of inquiry.
In the absence of comments in response
to the October Proposed Regulations, this
FRFA is presented with the final rule.
In addition, pursuant to section 7805(f)
of the Code, the April, October, and
December proposed regulations preced-
ing this final rule were submitted to the
Chief Counsel for the Office of Advocacy
of the Small Business Administration for
comment on its impact on small business,
and no comments were received from the
Chief Counsel for the Office of Advocacy
of the Small Business Administration.
A. Need for and objectives of the rule
The final regulations provide the eligi-
bility rules and key definitions regarding
the section 25E and section 30D credits
to allow taxpayers to know whether their
purchase of a previously-owned clean
vehicle or new clean vehicle is eligi-
ble for the section 25E and section 30D
credits, respectively. In addition, the final
regulations provide rules regarding the
recapture authority under sections 25E(e)
and 30D(f)(5), so that taxpayers and the
IRS have clear rules regarding when a
clean vehicle may cease being eligible
for the section 25E and section 30D cred-
its. Further, the final regulations provide
rules regarding 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 efficient and fair
tax administration.
The final regulations provide guid-
ance for purposes of taxpayers electing
to transfer vehicle credits under sections
25E(f) and 30D(g) to eligible entities, and
for eligible entities participating in the
advance payment program with respect to
those transferred credits. The final regula-
tions provide rules regarding the process
for taxpayers to elect to transfer the cred-
its and for eligible entities to register and
receive advance payments from the IRS,
and rules regarding the Federal income
tax treatment of the credit transfer elec-
tion, including recapture and excessive
payments. The final rules regarding the
credit transfer 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 final rules are expected to encour-
age taxpayers to increase the placing in
service of new and previously-owned
clean vehicles. Thus, the Treasury Depart-
ment and the IRS intend and expect that
the final rules will deliver benefits across
the economy and environment that will
beneficially impact various industries,
including clean vehicle manufacturers and
dealers.
B. Issues raised by public comments in
response to the IRFA
As previously noted, there were no
comments filed that specifically addressed
the impact of the proposed rules and pol-
icies on small entities or the number of
potentially impacted entities presented
in the IRFA. Additionally, no comments
were filed by the Chief Counsel of Advo-
cacy of the Small Business Administra-
tion.
C. 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
business. The applicability of these final

May 28, 2024 1286 Bulletin No. 2024–22
regulations does not depend on the size
of the business, as defined by the Small
Business Administration. As described
more fully in the Summary of Comments
and Explanation of Revisions to this final
regulation and in this FRFA, 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 that
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 com-
ments on this final rule.
D. 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
program. Although the Treasury Depart-
ment and the IRS do not have sufficient
data to precisely determine the likely
extent of the increased costs of compli-
ance, the estimated burden of comply-
ing with the recordkeeping and reporting
requirements are described in section II
of the Special Analyses regarding the
PRA. The Treasury Department and the
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 the 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 the IRS estimate
each election will take approximately 15
minutes to complete, for a total burden of
approximately 244,688 hours per year.
E. Steps taken to minimize impacts on
small entities and alternatives considered
The Treasury Department and the IRS
considered various alternatives in promul-
gating these final regulations. Significant
alternatives considered include: (1) the sale
price definition in §1.25E-1(b)(16); (2) the
first transfer rule described in §1.25E-1(b)
(14)(ii); (3) the recapture rules provided in
§§1.25E-2(c) and 1.30D-4(e), and (4) the
dealer registration requirements provided
in §§1.25E-3(c) and 1.30D-5(c).
Regarding the sale price definition in
§1.25E-1(b)(16), the Treasury Department
and the IRS considered the appropriate
scope of the definition and how the defini-
tion of sale price should be consistent with
or diverge from the definition of manufac-
turer’s suggested retail price for purposes
of section 30D(f)(11). The definition of
“manufacturer’s suggested retail price” in
§1.30D-2(b) 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 definition includes optional
accessories or items included by the manu-
facturer at the time of delivery to the dealer
but excludes delivery charges to the dealer.
For previously-owned clean vehicles, how-
ever, there are not similar vehicle labeling
standards that provide a standard for defin-
ing sale price. In addition, in a previous-
ly-owned clean vehicle sale, the dealer and
buyer may negotiate to characterize a por-
tion of the sale price as a separately stated
fee or charge (other than those required by
law) to avoid the section 25E sale price cap
of $25,000. To prevent this type of rechar-
acterization, §1.25E-1(b)(16) defines sale
price to mean the total sale price agreed
upon by the buyer and the dealer, including
any delivery charges. This definition spe-
cifically excludes separately-stated taxes
and fees required by State or local law
because such taxes and fees are not subject
to negotiation or recharacterization by the
dealer and buyer.
The Treasury Department and the IRS
considered various alternatives to the first
transfer rule described in §1.25E-1(b)(14)
(ii). This rule is necessary to determine
whether a sale of a previously-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 sec-
tion 25E credit in the prior three years. As
a result, if a previously-owned clean vehi-
cle is transferred more than once after the
date of enactment of section 25E, there is
no way for the parties after the first trans-
fer to know if the first transfer was to a
qualified buyer. Because the IRS may have
access to some information necessary to
determine whether a first transfer was to a
qualified buyer, the Treasury Department
and the IRS considered alternatives to the
first transfer rule such as a look-up tool
regarding prior claims of the section 25E
credit for a particular vehicle or informa-
tion regarding prior vehicle purchasers.
However, disclosure of this information
raises significant confidentiality issues.
Accordingly, the Treasury Department and
the IRS have provided the first transfer rule
to provide certainty to buyers and dealers
as to which transfer of a previously-owned
clean vehicle is the first transfer and will
qualify for the section 25E credit by rely-
ing on the vehicle history report.
The Treasury Department and the IRS
considered alternatives to the recapture
rules provided in §§1.25E-2(c) and 1.30D-
4(e). Given the increased availability and
benefits of the section 30D credit and the
new section 25E credit arising because

Bulletin No. 2024–22 1287 May 28, 2024
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 vehicle
would make the taxpayer ineligible for the
credit. Longer and shorter periods of time
were considered. Based on industry stan-
dard return policies, including money-back
guarantees, the Treasury Department and
the IRS determined that it was appropriate
to deny the benefit of the credit if the vehi-
cle 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 §§1.25E-
3(c) and 1.30D-5(c), the Treasury Depart-
ment 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. In addi-
tion, the Treasury Department and the IRS
determined 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 deter-
mined that dealer tax compliance was nec-
essary to ensure that advance payments are
being paid only to compliant dealers.
F. Duplicative, overlapping, or conflicting
Federal rules
The final rule does not duplicate, over-
lap, or conflict with any relevant Fed-
eral rules. As discussed in the Summary
of Comments and the Explanation of
Revisions, the final rules merely provide
requirements, procedures, and defini-
tions related to the credit transfer election
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.
IV. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates
Reform Act of 1995 requires that agencies
assess anticipated costs and benefits and
take certain other actions before issuing a
final rule that includes any Federal man-
date that may result in expenditures in
any one year by a State, local, or Tribal
government, in the aggregate, or by the
private sector, of $100 million in 1995
dollars, updated annually for inflation.
In 2023, that threshold is approximately
$198 million. This final rule does not
include any Federal mandate that may
result in expenditures by State, local, or
Tribal governments, or by the private sec-
tor in excess of that threshold.
V. Executive Order 13132: Federalism
Executive Order 13132 (Federalism)
prohibits an agency (to the extent practi-
cable and permitted by law) from promul-
gating any regulation that has federalism
implications, unless the agency meets the
consultation and funding requirements
of section 6 of the Executive order, 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. This final 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 Regula-
tions under Executive Order 12866 (June
9, 2023), tax regulatory actions issued by
the IRS are not subject to the requirements
of section 6 of Executive Order 12866, as
amended. Therefore, a regulatory impact
assessment is not required.
VII. Congressional Review Act
Pursuant to the Congressional Review
Act (5 U.S.C. 801 et seq.), the Office of
Information and Regulatory Affairs desig-
nated this rule as a major rule as defined
by 5 U.S.C. 804(2).
Statement of Availability of IRS
Documents
The IRS Revenue Procedures, Notices,
and other guidance cited in this pream-
ble is published in the Internal Revenue
Bulletin and is available from the Super-
intendent of Documents, U.S. Govern-
ment Publishing Office, Washington, DC,
20402, or by visiting the IRS website at
https://www.irs.gov.
Drafting Information
The principal authors of the regulations
are Rika Valdman, Maggie Stehn, Nicole
Stenchever, Mark C. Frantz, Jr., James
Williford, and Iris Chung of the Office of
Associate Chief Counsel (Passthroughs &
Special Industries). However, other per-
sonnel from the Treasury Department and
the IRS participated in the development of
the final regulations.
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, Penalties, Reporting and
recordkeeping requirements.
Amendments to the Regulations
Accordingly, the Treasury Department
and the IRS 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

May 28, 2024 1288 Bulletin No. 2024–22
1.25E-3, and 1.30D-1 through 1.30D-6 to
read in part as follows:
Authority: 26 U.S.C. 7805 * * *
* * * * *
Section 1.25E-1 also issued under 26
U.S.C. 25E.
Section 1.25E-2 also issued under 26
U.S.C. 25E.
Section 1.25E-3 also issued under 26
U.S.C. 25E, 26 U.S.C. 30D(g)(1) and (g)
(10), and 26 U.S.C. 6011.
* * * * *
Section 1.30D-1 also issued under 26
U.S.C. 30D.
Section 1.30D-2 also issued under 26
U.S.C. 30D.
Section 1.30D-3 also issued under 26
U.S.C. 30D.
Section 1.30D-4 also issued under 26
U.S.C. 30D and 26 U.S.C. 45W(d)(3).
Section 1.30D-5 also issued under 26
U.S.C. 30D and 26 U.S.C. 6011.
Section 1.30D-6 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) Advance payment program.
(2) Credit transfer election.
(3) Dealer.
(4) Dealer tax compliance.
(5) Electing taxpayer.
(6) Eligible entity.
(7) Excessive payment.
(8) Incentive.
(i) For purposes of sale price.
(ii) For purposes of eligible entity
requirements.
(9) Modified adjusted gross income.
(10) Placed in service.
(11) Previously-owned clean vehicle.
(12) Qualified buyer.
(13) Qualified manufacturer.
(14) Qualified sale.
(15) Registered dealer.
(16) Sale price.
(17) Section 25E regulations.
(18) Seller report.
(19) Time of sale.
(20) Vehicle history report.
(c) Limitation based on modified
adjusted gross income.
(1) In general.
(2) Threshold amount.
(3) Special rule for change in filing sta-
tus.
(d) Credit may be claimed on only one
tax return.
(1) In general.
(2) Seller reporting.
(e) Examples.
(1) Example 1: First transfer since
enactment of section 25E.
(2) Example 2: Multiple transfers since
enactment of section 25E.
(3) Example 3: Multiple transfers;
commercial purchaser.
(4) Example 4: Multiple transfers;
buyer exceeds modified adjusted gross
income limitation.
(5) Example 5: Multiple transfers;
buyer elects to not take credit.
(6) Example 6: Multiple transfers; sale
between dealers.
(f) Reliance on vehicle history report
for purposes of determining whether sale
is a qualified sale.
(g) Severability.
(h) Applicability date.
§1.25E-2 Special rules.
(a) In general.
(b) No double benefit.
(1) In general.
(2) Interaction between section 25E
and 30D credits.
(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
credit transfer election.
(3) Example: Vehicle return.
(d) Branded title.
(e) Seller registration.
(f) Requirement to file income tax
return.
(g) Taxpayer reliance on manufacturer
certifications and periodic written reports
to IRS.
(h) Severability.
(i) Applicability date.
§1.25E-3 Transfer of credit.
(a) In general.
(b) Definitions.
(1) Advance payment program.
(2) Credit transfer election.
(3) Dealer tax compliance.
(4) Electing taxpayer.
(5) Eligible entity.
(6) Registered dealer.
(7) Time of sale.
(c) Dealer registration.
(1) In general.
(2) Dealer tax compliance required.
(3) Suspension of registration.
(4) Revocation of registration.
(d) Credit transfer election by electing
taxpayer.
(e) Federal income tax consequences
of credit transfer election.
(1) Tax consequences for electing tax-
payer.
(2) Tax consequences for eligible entity.
(3) Form of payment from eligible
entity to electing taxpayer.
(4) Additional requirements.
(5) Examples.
(i) Example 1: Electing taxpayer’s reg-
ular tax liability less than amount of credit.
(A) Facts.
(B) Analysis.
(ii) Example 2: Non-cash payment by
eligible entity to electing taxpayer.
(A) Facts.
(B) Analysis.
(iii) Example 3: Eligible entity is a
partnership.
(A) Facts.
(B) Analysis.
(f) Advance payments received by eli-
gible entities.
(1) In general.
(2) Requirements for a registered
dealer to become an eligible entity.

Bulletin No. 2024–22 1289 May 28, 2024
(g) Increase in tax.
(1) Recapture if electing 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
electing taxpayer’s modified adjusted
gross income exceeds the limitation.
(3) Examples.
(i) Example 1: Registered dealer is not
an eligible entity.
(A) Facts.
(B) Analysis.
(ii) Example 2: Incorrect manufacturer
certifications.
(A) Facts.
(B) Analysis.
(h) Return requirement.
(i) Two credit 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 pre-
viously-owned clean vehicle, if 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 (section
25E credit). Section 1.25E-2 provides spe-
cial rules under section 25E(e) and other
special rules with respect to the section
25E credit. Section 1.25E-3 provides rules
under section 25E(f).
(b) Definitions. The definitions in this
paragraph (b) apply for purposes of sec-
tion 25E and the section 25E regulations.
(1) Advance payment program. Advance
payment program means advance payment
program as defined in §1.25E-3(b)(1).
(2) Credit transfer election. Credit
transfer election means credit transfer
election as defined in §1.25E-3(b)(2).
(3) Dealer. Dealer has the meaning
provided in section 25E(c)(2)(A) by ref-
erence to section 30D(g)(8) of the Code,
except that the term does not include
persons licensed solely by a territory of
the United States, and includes a dealer
licensed by any jurisdiction described in
section 30D(g)(8) (other than one licensed
solely by a territory of the United States)
that makes sales at sites outside of the
jurisdiction in which it is licensed.
(4) Dealer tax compliance. Dealer tax
compliance means dealer tax compliance
as defined in §1.25E-3(b)(3).
(5) Electing taxpayer. Electing tax-
payer means electing taxpayer as defined
in §1.25E-3(b)(4).
(6) Eligible entity. Eligible entity
means eligible entity as defined in §1.25E-
3(b)(5).
(7) Excessive payment. Excessive pay-
ment means excessive payment as defined
in §1.25E-3(g)(2)(iii).
(8) Incentive—(i) For purposes of
sale price. For purposes of the definition
of sale price in §1.25E-1(b)(16), incen-
tive means any reduction in 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 §1.25E-3.
(ii) For purposes of eligible entity
requirements. For purposes of the eligible
entity requirements for a credit transfer
election pursuant to sections 25E(f) and
30D(g)(2)(B) and (D), incentive means
any reduction in price offered to the tax-
payer by the dealer or manufacturer of the
previously-owned clean vehicle, includ-
ing in combination with other incentives,
other than a reduction in the form of a par-
tial payment or down payment for the pur-
chase of a previously-owned clean vehicle
pursuant to section 25E(f) and §1.25E-3.
(9) Modified adjusted gross income.
Modified adjusted gross income means
adjusted gross income (as defined in sec-
tion 62 of the Code) increased by any
amount excluded from gross income under
section 911, 931, or 933 of the Code.
(10) 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.
(11) Previously-owned clean vehicle.
Previously-owned clean vehicle has the
meaning provided in section 25E(c)(1).
Vehicles that may qualify as previous-
ly-owned clean vehicles include battery
electric vehicles, plug-in hybrid electric
vehicles, fuel cell motor vehicles, and
plug-in hybrid fuel cell motor vehicles.
(12) 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 during the three-year period begin-
ning three years before the date of the sale
of such vehicle and ending on the date of
the sale of such vehicle.
(13) Qualified manufacturer. Qualified
manufacturer means qualified manufac-
turer as defined in §1.30D-2(b)(42).
(14) Qualified sale. Qualified sale
means a sale of a motor vehicle—
(i) By a dealer;
(ii) For a sale price that does not exceed
$25,000; and
(iii) That is a sale to a qualified buyer
(other than the person with whom the
original use of such vehicle commenced),
and that is the first transfer of the motor
vehicle since August 16, 2022 (other than
a transfer to a dealer).
(15) Registered dealer. Registered
dealer means registered dealer as defined
in §1.25E-3(b)(6).
(16) Sale price. The sale price of a pre-
viously-owned clean vehicle means the
total price agreed upon by the taxpayer
and dealer in a written contract at the time
of sale, including any delivery charges
and after the application of any incentives.
The sale price of a previously-owned clean
vehicle does not include separately stated
taxes and fees required by State or local
law. The sale price of a previously-owned
clean vehicle is determined before the
application of any trade-in value.
(17) Section 25E regulations. Section
25E regulations means this section and
§§1.25E-2 and 1.25E-3.

May 28, 2024 1290 Bulletin No. 2024–22
(18) Seller report. Seller report means
the report described in section 25E(c)(1)
(D)(i) by reference to section 30D(d)(1)
(H) that the seller of a previously-owned
clean vehicle provides to the taxpayer and
the IRS in the manner provided in, and
containing the information described in,
guidance published in the Internal Reve-
nue Bulletin (see §601.601 of this chap-
ter). The seller report must be transmitted
to the IRS electronically. The term seller
report does not include a report rejected
by the IRS due to the information con-
tained therein not matching IRS records.
(19) Time of sale. Time of sale means
time of sale as defined in §1.25E-3(b)(7).
(20) Vehicle history report. Vehicle his-
tory report means a report that provides
the ownership history of a motor vehicle.
Vehicle history report includes a vehicle
history report issued by a data provider
approved by the National Motor Vehicle
Title Information System.
(c) Limitation based on modified
adjusted gross income—(1) In general.
Under section 25E(b)(1), 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
section 25E(b)(1) and paragraph (c)(1) of
this section, the threshold amount is deter-
mined based on the taxpayer’s return fil-
ing status for the taxable year, as set forth
in paragraphs (c)(2)(i) through (iii) of this
section. See section 25E(b)(2).
(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)), 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 sta-
tus. If the taxpayer’s filing status for the
taxable year differs from the taxpayer’s
filing status in the preceding taxable year,
then the taxpayer satisfies the limitation
in section 25E(b)(1) and 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) Credit may be claimed on only one
tax return—(1) In general. The amount
of the section 25E credit attributable to
a previously-owned clean vehicle may
be claimed on only one Federal income
tax return, including on a joint return
for which one of the spouses is listed on
the seller report. In the event a previous-
ly-owned clean vehicle is placed in ser-
vice by multiple taxpayers who do not file
a joint return, such as married individu-
als filing separate returns, no allocation
or proration of the section 25E credit is
available.
(2) Seller reporting. The name and
taxpayer identification number of the
taxpayer 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
Federal income tax return of the taxpayer
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. On August 1, 2022, a dealer sells a
previously-owned vehicle that satisfies the require-
ments of section 25E(c)(1)(A), (B), and (D). On
May 7, 2024, a dealer sells the vehicle to a qualified
buyer, X, for a sale price of $24,000. X places the
vehicle in service the same day. The May 7, 2024,
sale to X is the first transfer of the vehicle since
the enactment of section 25E.. The May 7, 2024,
sale is a qualified sale pursuant to section 25E(c)(2)
and paragraph (b)(14) of this section. As a result,
the vehicle also satisfies the requirement of section
25E(c)(1)(C) and is a previously-owned clean vehi-
cle as defined in section 25E(c)(1) and paragraph
(b)(11) of this section.
(2) Example 2: Multiple transfers since enact-
ment of section 25E. On July 1, 2023, a dealer sells
a previously-owned vehicle that satisfies the require-
ments of section 25E(c)(1)(A), (B), and (D) to an
individual, X, for a sale price of $30,000. X places
the vehicle in service the same day. This is the first
transfer of the vehicle since the enactment of section
25E. On May 7, 2024, a dealer sells the vehicle to an
individual, Y, for a sale price of $24,500. The July 1,
2023, sale of the vehicle to X is not a qualified sale
because the sale price exceeds the $25,000 limitation
described in section 25E(c)(2)(B) and paragraph (b)
(14) of this section. The May 7, 2024, sale to Y is
not a qualified sale because it is not the first transfer
since the enactment of section 25E.
(3) Example 3: Multiple transfers; commercial
purchaser. The facts are the same as in paragraph (e)
(2) of this section (Example 2), except that X is a
partnership and the July 1, 2023, sale is for a sale
price of $24,000. Although the vehicle is a previous-
ly-owned clean vehicle as defined in section 25E(c)
(1) and paragraph (b)(11) of this section, no section
25E credit is allowed in relation to the sale because X
is not a qualified buyer. The May 7, 2024, sale to Y is
not a qualified sale because it is not the first transfer
since enactment of section 25E.
(4) Example 4: Multiple transfers; buyer exceeds
modified adjusted gross income limitation. The facts
are the same as in paragraph (e)(2) of this section
(Example 2), except the July 1, 2023, sale is for a sale
price of $24,000 and X’s modified adjusted gross
income exceeds the limitation described in section
25E(b)(2) and paragraph (c) of this section. No sec-
tion 25E credit is allowed in relation to the July 1,
2023, sale to X because X’s modified adjusted gross
income exceeds the limitation described in section
25E(b)(2) and paragraph (c) of this section. The May
7, 2024, sale to Y is not a qualified sale because it is
not the first transfer since the enactment of section
25E.
(5) Example 5: Multiple transfers; buyer elects
to not take credit. The facts are the same as in para-
graph (e)(2) of this section (Example 2), except the
July 1, 2023, sale is for a sale price of $24,000 and X
elects to not claim the section 25E credit. The May 7,
2024, sale to Y is not a qualified sale because it is not
the first transfer since the enactment of section 25E.
(6) Example 6: Multiple transfers; sale between
dealers. On July 1, 2023, a dealer, D1, sells a previ-
ously-owned vehicle that satisfies the requirements
of section 25E(c)(1)(A), (B), and (D) to another
dealer, D2, for $18,000. D1 and D2 are not individ-
uals. On August 1, 2024, D2 sells the vehicle to an
individual, Y, for a sale price of $24,500. Y places
the vehicle in service the same day. Y satisfies the
modified adjusted gross income limitation in section
25E(b)(2) and paragraph (c) of this section. The July
1, 2023, sale to D2 is ignored because it is a transfer
between dealers. Further, with regard to the July 1,
2023, sale, D2 is not a qualified buyer because D2
is not an individual. The May 7, 2024, sale to Y is
a qualified sale because it is the first transfer that is
regarded since the enactment of section 25E.
(f) Reliance on vehicle history report
for purposes of determining whether sale
is a qualified sale. A taxpayer may rely on
a vehicle history report obtained on the
date of sale or as part of the sale trans-
action to determine whether the require-
ments of section 25E(c)(2)(C) and para-
graph (b)(14) of this section are satisfied,
including in the case where there has been
a prior sale and return or resale described
in §1.25E-2(c).
(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.

Bulletin No. 2024–22 1291 May 28, 2024
(h) Applicability date. This section
applies to previously-owned clean vehi-
cles placed in service after December 31,
2022, in taxable years ending after Octo-
ber 10, 2023.
§1.25E-2 Special rules.
(a) In general. This section provides
guidance under section 25E(e) of the Inter-
nal Revenue Code (Code), which incorpo-
rates rules similar to the rules of section
30D(f) of the Code, 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 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. This section also provides guidance
regarding other special rules with respect to
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 between section 25E
and section 30D credits. 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 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 pre-
viously-owned clean vehicle 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 vehi-
cle;
(B) The sale will be treated as not
having occurred (and no transfer of the
vehicle is considered to have occurred by
reason of the cancelled sale), and the vehi-
cle will, therefore, still be eligible for the
section 25E credit upon a subsequent sale
meeting the requirements of section 25E
and the section 25E regulations;
(C) The seller report must be rescinded
by the seller in the manner set forth in
guidance published in the Internal Reve-
nue Bulletin (see §601.601 of this chap-
ter); and
(D) The taxpayer cannot make a credit
transfer election under section 25E(f) and
§1.25E-3 with respect to the cancelled sale.
(ii) Vehicle return. If a taxpayer returns
a previously-owned clean 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 of the vehicle is
therefore considered to have occurred by
reason of the sale), and the vehicle will not
qualify for the section 25E credit upon a
subsequent sale;
(C) The seller report must be updated
by the seller; and
(D) A credit 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
entity as an excessive payment pursuant to
§1.25E-3(g)(2).
(iii) Resale. If a taxpayer resells a pre-
viously-owned clean vehicle within 30
days of placing the vehicle in service,
then the taxpayer is treated as having
purchased such vehicle with the intent to
resell, and—
(A) The taxpayer cannot claim the sec-
tion 25E credit with respect to the vehicle;
(B) The sale to the taxpayer will be
treated as having occurred (and a transfer
of the vehicle is therefore considered to
have occurred by reason of the sale), and
the vehicle will not qualify for the section
25E credit upon a subsequent sale;
(C) The seller report will not be
updated;
(D) A credit 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 amount of any transferred
credit will be collected from the taxpayer
as an increase in tax imposed by chapter 1
of the Code for the taxable year in which
the vehicle was placed in service.
(iv) Other returns and resales. In the
case of a vehicle return not described in
paragraph (c)(1)(ii) of this section or a
resale not described in paragraph (c)(1)
(iii) of this section, the previously-owned
clean vehicle will not be eligible for the
section 25E credit upon a subsequent sale.
(2) Recapture rules in the case of a
credit transfer election. For additional
recapture rules that apply in the case of a
credit transfer election, see §1.25E-3(g)
(1). For excessive payment rules that
apply in the case of an advance payment
made to an eligible entity, see §1.25E-3(g)
(2).
(3) Example: Vehicle return. On May 1, 2024,
a dealer, D, sells a vehicle that satisfies the require-
ments of section 25E(c)(1) to a qualified buyer, X.
X returns the vehicle to D within 30 days of placing
the vehicle in service, and does not claim the sec-
tion 25E credit. On July 9, 2024, D sells the vehicle
to a qualified buyer, Y, for a sale price of $24,000.
The vehicle history report obtained on July 9, 2024,
reflects the May 1, 2024, sale and subsequent return
of the vehicle. The July 9, 2024, sale of the vehi-
cle is not a qualified sale because it is not the first
transfer of the vehicle after the enactment of section
25E. Therefore, no section 25E credit is allowed in
relation to that sale. It is irrelevant that X did not
claim the section 25E credit with respect to the May
1, 2024, sale.
(d) Branded title. A title to a previous-
ly-owned clean vehicle indicating that
such vehicle has been damaged, or is oth-
erwise 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 Inter-
nal Revenue Bulletin (see §601.601 of
this chapter) for purposes of filing seller
reports (as defined in §1.25E-1(b)(18)).
(f) Requirement to file income tax
return. No section 25E credit is allowed
unless the taxpayer claiming such credit
files a Federal income tax return for
the taxable year in which the previous-
ly-owned clean vehicle is placed in ser-
vice. The taxpayer must attach to such
return a completed Form 8936, Clean
Vehicle Credits, or successor form, that
includes all information required by the
form and instructions. The taxpayer must
also attach a completed Schedule A (Form
8936), Clean Vehicle Credit Amount, or
successor form or schedule, that includes
all information required by the schedule
and instructions, such as the vehicle iden-

May 28, 2024 1292 Bulletin No. 2024–22
tification number of the previously-owned
clean vehicle.
(g) Taxpayer reliance on manufacturer
certifications and periodic written reports
to IRS. A taxpayer who acquires a previ-
ously-owned clean vehicle in a qualified
sale and places it in service may rely on
the manufacturer’s certification concern-
ing the manufacturer’s status as a quali-
fied manufacturer. A taxpayer also may
rely on the information and certifications
contained in the qualified manufacturer’s
periodic written reports to the IRS for pur-
poses of determining whether a vehicle
is a previously-owned clean vehicle. The
procedures for such written reports are
established in guidance published in the
Internal Revenue Bulletin (see §601.601
of this chapter). To the extent a taxpayer
relies on such certifications or informa-
tion, the previously-owned clean vehicle
the taxpayer acquires will be deemed to
meet the requirements of section 25E(c)
(1)(D) (except the section 30D(d)(1)(H)
requirement cross-referenced in section
25E(c)(1)(D)(i), which must be satisfied
separately), provided the certifications or
information relied upon by the taxpayer
support this result. See §1.25E-3(g)(3)(ii)
for an example that illustrates the inter-
play between the rule in this paragraph (g)
and the excessive payment rule in §1.25E-
3(g)(2).
(h) 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.
(i) Applicability date. This section
applies to previously-owned clean vehi-
cles placed in service after December 31,
2022, in taxable years ending after Octo-
ber 10, 2023.
§1.25E-3 Transfer of credit.
(a) In general. This section provides
rules related to the transfer and advance
payment of the section 25E credit pursu-
ant to section 25E(f) of the Internal Rev-
enue Code (Code) by cross reference to
section 30D(g) of the Code. Under the
rules of section 30D(g) and this section,
a taxpayer may elect to transfer a section
25E credit to an eligible entity, and the
eligible entity may receive an advance
payment for such credit, provided certain
requirements are met. See paragraph (d) of
this section for rules applicable to credit
transfer elections. See paragraph (f) of this
section for rules applicable to advance
payments of transferred section 25E cred-
its. Section 30D(g)(2) sets forth certain
requirements that a dealer must satisfy
to be an eligible entity for credit transfer
and advance payment purposes. Section
30D(g)(2)(A) requires registration with
the IRS. See paragraph (c) of this section
for rules related to dealer registration.
Section 30D(g)(2)(B) through (D) and
paragraph (f)(2) of this section impose
additional requirements that a registered
dealer must satisfy in order to be an eligi-
ble entity for credit transfer and advance
payment purposes.
(b) Definitions. This paragraph (b) pro-
vides definitions that apply for purposes
of section 25E(f) and this section. See
§1.25E-1(b) for definitions that are gen-
erally applicable to section 25E and the
section 25E regulations.
(1) Advance payment program.
Advance payment program means the pro-
gram described in paragraph (f)(1) of this
section.
(2) Credit transfer election. Credit
transfer election has the meaning pro-
vided in sections 25E(f) and 30D(g), and
paragraph (d) of this section.
(3) Dealer tax compliance. Dealer
tax compliance means that the dealer has
filed all required Federal information and
tax returns, including for Federal income
and employment tax purposes, and the
dealer has paid all Federal tax, penalties,
and interest due as of the time of sale.
A dealer that has entered into an install-
ment agreement with the IRS for which a
dealer is current on its obligations (includ-
ing required filings) is treated as being in
dealer tax compliance.
(4) Electing taxpayer. Electing tax-
payer means an individual who purchases
and places in service a previously-owned
clean vehicle and elects to transfer the
section 25E credit that would otherwise
be allowable to such individual to an eli-
gible entity pursuant to section 25E(f) and
paragraph (d) of this section. A taxpayer is
an electing taxpayer only if the taxpayer
makes certain attestations to the registered
dealer, pursuant to procedures provided in
guidance published in the Internal Reve-
nue Bulletin (see §601.601 of this chap-
ter), including that the taxpayer does not
anticipate exceeding the modified adjusted
gross income limitation of section 25E(b)
(1) and §1.25E-1(b).
(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 means a dealer that has completed
registration with the IRS as provided in
paragraph (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)(10).
(c) Dealer registration—(1) In gen-
eral. A dealer must register with the IRS
in the manner set forth in guidance pub-
lished in the Internal Revenue Bulletin
(see §601.601 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) Dealer tax compliance required. A
dealer must be in dealer tax compliance
to complete and maintain its registration
with the IRS. 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
registration with the IRS, but the dealer
will not be eligible for the advance pay-
ment program (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 compliance, and the dealer
will have the opportunity to address any
failure through regular procedures. If the
failure is corrected, the IRS will complete
the dealer’s registration, and, provided all
other requirements of section 25E(f) and
this section are met, the dealer will then
be allowed to receive transferred section
25E credits and participate in the advance
payment program. Additional procedural
guidance regarding this paragraph is set
forth in guidance published in the Inter-
nal Revenue Bulletin (see §601.601 of this
chapter).
(3) Suspension of registration. A regis-
tered dealer’s registration may be suspended
pursuant to the procedures described in
guidance published in the Internal Revenue
Bulletin (see §601.601 of this chapter). Any

Bulletin No. 2024–22 1293 May 28, 2024
decision made by the IRS relating to the
suspension of a registered dealer’s registra-
tion is not subject to administrative 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 registration. A regis-
tered dealer’s registration may be revoked
pursuant to the procedures described in
guidance published in the Internal Reve-
nue Bulletin (see §601.601). Any decision
made by the IRS relating to the revocation
of a dealer’s registration is not subject to
administrative appeal to the IRS Indepen-
dent 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.
(d) Credit transfer election by electing
taxpayer. For a previously-owned clean
vehicle placed in service after December
31, 2023, an electing taxpayer may elect
to apply the rules of section 25E(f) and
this section to make a credit transfer elec-
tion with respect to the vehicle so that the
section 25E credit is allowed to the eligi-
ble entity specified in the credit transfer
election (and not to the electing taxpayer)
pursuant to the advance payment program
described in paragraph (f) of this section.
The electing taxpayer, as part of the credit
transfer election, must transfer the entire
amount of the credit that would other-
wise be allowable to the electing taxpayer
under section 25E with respect to the
vehicle, and the eligible entity specified
in the credit transfer election must pay the
electing taxpayer an amount equal to the
amount of the credit included in the credit
transfer election. A credit transfer election
must be made no later than the time of
sale, and must be made in the manner set
forth in guidance published in the Inter-
nal Revenue Bulletin (see §601.601 of
this chapter). Once made, a credit transfer
election is irrevocable.
(e) Federal income tax consequences
of credit transfer election—(1) Tax conse-
quences for electing taxpayer. In the case
of a credit 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 on the basis that it
exceeded the electing taxpayer’s regular
tax liability;
(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 credit
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 rea-
son of section 25E(f)) and paragraph (d)
of this section is treated as repaid by the
electing taxpayer to the eligible entity as
partial payment of the sale price of the
previously-owned clean vehicle. Thus,
the repayment by the electing taxpayer is
included in the electing taxpayer’s basis in
the previously-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) Tax consequences for eligible entity.
In the case of a credit 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
25E(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 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) (by rea-
son of section 25E(f)) and paragraph (d)
of this section to an electing taxpayer is
not deductible by the eligible entity;
(v) The payment made by an eligible
entity to the electing taxpayer under sec-
tion 30D(g)(2)(C) (by reason of section
25E(f)) and paragraph (d) of this section
is treated as paid by the electing taxpayer
to the eligible entity as partial payment
of the sale price of the previously-owned
clean vehicle. Thus, the repayment by the
electing taxpayer is treated as an amount
realized by the eligible entity under sec-
tion 1001 of the Code and the regulations
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
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, in the form of a
partial payment or down payment for the
purchase of the previously-owned clean
vehicle, or as a reduction in sale price
(without the payment of cash) of the pre-
viously-owned clean vehicle.
(4) Additional requirements. In the case
of a credit 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 electing
taxpayer as if the credit transfer election
were not made (so, for example, the elect-
ing taxpayer must reduce the electing tax-
payer’s basis in the vehicle by the amount
of the section 25E credit, regardless of the
credit 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).

May 28, 2024 1294 Bulletin No. 2024–22
(iii) Section 30D(f)(9) (regarding the
vehicle identification number require-
ment), by reason of section 25E(e), and
section 25E(d) (regarding the vehicle
identification number requirement) will
be treated as satisfied if the eligible entity
provides the vehicle identification number
of such vehicle to the IRS in the form and
manner set forth in guidance published
in the Internal Revenue Bulletin (see
§601.601 of this chapter). The electing
taxpayer must also provide the vehicle
identification number with their Federal
income tax return for the taxable year in
which the vehicle is placed in service. See
section 6213(g)(2)(U) of the Code and
§301.6213-2 of this chapter for rules relat-
ing to the omission of a correct vehicle
identification number.
(5) Examples. The following examples
illustrate the rules of paragraph (e) of this
section.
(i) Example 1: Electing taxpayer’s regular tax
liability less than amount of credit—(A) Facts. T,
an individual, purchases a previously-owned clean
vehicle from a dealer, D, which is a C corporation. T
satisfies the requirements to be an electing taxpayer
and elects to transfer the section 25E credit to D. D
is a registered dealer and satisfies the requirements
to be an eligible entity. The sale price of the vehicle
is $24,000. The section 25E credit otherwise allow-
able to T is $4,000. D makes the payment required
to be made to T in the form of a cash payment of
$4,000. T uses the $4,000 as a partial payment for
the vehicle. T pays D an additional $20,000 from
other funds. T’s regular tax liability for the year is
less than $4,000.
(B) Analysis. Under paragraph (e)(1)(i) of this
section, T may transfer the credit to D, even though
T’s regular tax liability is less than $4,000, and no
amount of the credit will be recaptured from T on the
basis that the allowable credit exceeded T’s regular
tax liability. D’s $4,000 payment to T is not included
in T’s gross income, and the sale price of the vehi-
cle is $24,000 (including both the $4,000 payment
and the additional $20,000 paid by T from other
funds), prior to the application of the basis reduc-
tion rule of section 30D(f)(1) (by reason of section
25E(e)). After application of the basis reduction
rule, T’s basis in the vehicle is $20,000. D is eligi-
ble 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(e)) and para-
graph (f) of this section. Under paragraph (e)(2) of
this section, D may receive the advance payment
regardless of whether D’s regular tax liability is less
than $4,000. The advance payment is not treated
as a credit toward D’s tax liability (if any), nor is it
included in D’s gross income. Further, D’s $4,000
payment to T is not deductible, and D’s amount real-
ized is $24,000 upon the sale of the vehicle (includ-
ing both the $4,000 payment from D to T that T uses
as a partial payment, and the additional $20,000 paid
by T from other funds).
(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 D makes the pay-
ment to T in the form of a reduction in the sale price
of the vehicle (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 pay-
ment from an eligible entity to an electing taxpayer
(for example, a payment in cash or a payment in the
form of a reduction in sale price). Thus, the analysis
is the same as in paragraph (e)(5)(i)(B) of this sec-
tion (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 D is a partnership.
(B) Analysis. The analysis as to T is the same as
in paragraph (e)(5)(i)(B) of this section (analysis of
Example 1). Because D 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 allocated 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 eligible
entity may receive advance payments from
the IRS (corresponding to the amount of
the section 25E credit for which a credit
transfer election was made by an electing
taxpayer to transfer the credit to the eligi-
ble 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
or information return, as appropriate, for
the taxable year with respect to which the
credit transfer election corresponds. This
advance payment program is the exclusive
mechanism for an eligible entity to receive
the section 25E credit transferred pursu-
ant to section 25E(f) and paragraph (d) of
this section. An eligible entity receiving
a transferred section 25E credit may not
claim the credit on a 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 in connection with a
credit transfer election, if it meets the fol-
lowing 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 credit 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 registered dealer meets any
other requirements set forth in guidance
published in the Internal Revenue Bulletin
(see §601.601 of this chapter) or in forms
and instructions; and
(iv) The registered dealer meets any
other requirements of section 25E(f) by
reference to section 30D(g), including
those in section 30D(g)(2)(B) through (E).
(g) Increase in tax—(1) Recapture
if electing taxpayer exceeds modified
adjusted gross income limitation. If an
electing taxpayer has modified adjusted
gross income that exceeds the limitation
in section 25E(b) and §1.25E-1(b), then
the income tax imposed on such taxpayer
under chapter 1 of the Code (chapter 1)
for the taxable year in which the vehi-
cle was placed in service is increased by
the amount of the payment received by
the taxpayer. The electing taxpayer must
recapture such amounts on the Federal
income tax return described in paragraph
(h) of this section.
(2) Excessive payments—(i) In gen-
eral. This paragraph provides rules under
section 25E(f) by reference to section
30D(g)(7)(B), which provides that rules
similar to the rules of section 6417(d)(6)
of the Code apply to the advance pay-
ment program. In the case of any advance
payment to an eligible entity that the
IRS determines constitutes an excessive
payment, the tax imposed on the eligi-
ble entity under chapter 1, regardless of
whether such entity would otherwise be
subject to tax under chapter 1, for the tax-
able year in which such determination 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 (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 previously-owned clean

Bulletin No. 2024–22 1295 May 28, 2024
vehicle (with respect to which a credit
transfer election was made by the electing
taxpayer) that is returned to the eligible
entity within 30 days of being placed in
service, the eligible entity will be treated
as having demonstrated that the excessive
payment resulted from reasonable cause.
(iii) Excessive payment defined. Exces-
sive 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 previously-owned
clean 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
electing taxpayer’s modified adjusted
gross income exceeds the limitation. Any
excess described in paragraph (g)(2)(iii)
(B) of this section that arises due to the
electing taxpayer exceeding the limitation
based on modified adjusted gross income
in section 25E(b) and §1.25E-1(b) is not
an excessive payment. Instead, the amount
of the advance payment is recaptured
from the taxpayer under section 25E(e)
and paragraph (g)(1) of this section.
(3) Examples. The following examples
illustrate the excessive payment rules in
paragraph (g)(2) of this section.
(i) Example 1: Registered dealer is not an eligi-
ble entity—(A) Facts. In 2024, D, a registered dealer,
receives an advance payment of $4,000 with respect
to a credit transferred pursuant to section 25E(f) and
paragraph (d) of this section for a previously-owned
clean vehicle, vehicle V. In 2025, the IRS determines
that D was not an eligible entity with respect to vehi-
cle V at the time it received the advance payment in
2024 because D failed to satisfy one of the require-
ments of section 30D(g)(2) (applicable by reason of
section 25E(e)) and paragraph (f)(2) of this section.
D is unable to show reasonable cause for the failure.
(B) 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 (f)(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 determi-
nation). This is comprised of the $4,000 excessive
payment plus the $800 penalty, calculated as 20%
of the $4,000 excessive payment (20% x $4,000 =
$800). This treatment applies regardless of whether
D is otherwise subject to tax under chapter 1 (for
example, if D is a partnership).
(ii) Example 2: Incorrect manufacturer certifi-
cations—(A) Facts. In 2024, T, a taxpayer, makes
an election to transfer a $4,000 credit pursuant to
section 25E(f) and paragraph (d) of this section to
registered dealer, E, with respect to vehicle V. M, the
manufacturer of vehicle V, certified to the IRS that
vehicle V has a battery with a capacity of not less
than 7 kilowatt hours (kwh). T and vehicle V oth-
erwise meet the eligibility requirements for the sec-
tion 25E credit. T, in reliance on the manufacturer’s
certification to the IRS regarding vehicle V’s battery
capacity, transfers the section 25E credit to E. Sub-
sequent to T’s purchase of vehicle V and election to
transfer the $4,000 credit to E, M reports to the IRS
that vehicle V has a battery capacity of less than 7
kwh.
(B) Analysis. Section 1.25E-2(g) provides that T
may rely on the information and certifications pro-
vided in M’s written report to the IRS for purposes of
determining whether vehicle V is a previously-owned
clean vehicle, as defined in section 25E(c)(1) and
§1.25E-1(b)(11). Because T relied on M’s certifica-
tion to the IRS regarding vehicle V’s battery capacity
and T and vehicle V otherwise meet the eligibility
requirements for the section 25E credit, vehicle V is
deemed to meet the requirements of section 30D(d)
(1)(F) (as cross-referenced in section 25E(c)(1)(D)
(i)). Under paragraph (g)(2)(iii)(B) of this section, an
advance payment to an eligible entity with respect
to a vehicle is an excessive payment to the extent
the payment exceeds the amount of the credit that,
without a credit transfer election, would be otherwise
allowable to the electing taxpayer with respect to the
vehicle for such taxable year. Because the amount
of the credit that would be allowable to T for 2024
is $4,000, and T transferred the $4,000 credit to E,
there is no excessive payment with respect to E.
(h) Return requirement. An electing
taxpayer that makes a credit transfer elec-
tion must file a Federal income tax return
for the taxable year in which the credit
transfer election is made and indicate
such election on the return in accordance
with the instructions to the form on which
the return is made. The electing taxpayer
must attach to such return a completed
Form 8936, Clean Vehicle Credits, or suc-
cessor form, that includes all information
required by the form and instructions. The
electing taxpayer must also attach a com-
pleted Schedule A (Form 8936), Clean
Vehicle Credit Amount, or successor form
or schedule, that includes all information
required by the schedule and instructions,
such as the vehicle identification number
of the previously-owned clean vehicle.
(i) Two credit transfer elections per
year. A taxpayer may make no more than
two credit transfer elections per taxable
year, consisting of either two elections to
transfer section 30D credits, or one section
30D credit and one election to transfer a
section 25E credit. In the case of taxpay-
ers who file a joint return, each individ-
ual taxpayer may make no more than two
credit 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 agencies’ intention that the remain-
ing provisions will continue in effect.
(k) Applicability date. This section
applies to previously-owned vehicles
placed in service after December 31, 2023,
in taxable years ending after December
31, 2023.
Par 3. Sections 1.30D-0 through
1.30D-6 are added to read as follows:
§1.30D-0 Table of contents.
This section lists the captions contained
in §§1.30D-1 through 1.30D-6.
§1.30D-1 Credit for new clean vehicles.
(a) In general.
(b) Application with other credits.
(1) Business credit treated as part of
general business credit.
(2) Apportionment of section 30D
credit.
(3) Personal credit limited based on tax
liability.
(c) Severability.
(d) Applicability date.
§1.30D-2 Definitions for purposes of
section 30D.
(a) In general.
(b) Definitions.
(1) Advance payment program.
(2) Applicable critical mineral.
(i) In general.
(ii) Example: Form of applicable criti-
cal mineral.
(3) Assembly.
(4) Associated constituent material.
(5) Battery.
(6) Battery cell.
(7) Battery cell production facility.

May 28, 2024 1296 Bulletin No. 2024–22
(8) Battery component.
(9) Battery materials.
(10) Clean vehicle battery.
(11) Compliant-battery ledger.
(12) Constituent materials.
(13) Country with which the United
States has a free trade agreement in effect.
(i) In general.
(ii) Free trade agreements in effect.
(iii) Updates.
(14) Credit transfer election.
(15) Dealer.
(16) Dealer tax compliance.
(17) Depreciable vehicle.
(18) Electing taxpayer.
(19) Eligible entity.
(20) Excessive payment.
(21) Extraction.
(22) FEOC-compliant.
(23) Final assembly.
(24) Foreign entity of concern.
(25) Impracticable-to-trace battery
materials.
(i) In general.
(ii) Identified impracticable-to-trace
battery materials.
(26) Incentive.
(27) Incremental value.
(28) Manufacturer.
(i) In general.
(ii) Modification of a new motor vehi-
cle.
(29) Manufacturer’s suggested retail
price.
(i) In general.
(ii) Retail price.
(iii) Retail delivered price.
(30) Manufacturing.
(31) Modified adjusted gross income.
(i) Individuals.
(ii) Estates and trusts.
(32) New clean vehicle.
(33) New qualified fuel cell motor
vehicle.
(34) North America.
(35) North American battery compo-
nent.
(36) Placed in service.
(37) Processing.
(38) Procurement chain.
(39) Qualifying battery component
content.
(40) Qualifying critical mineral.
(41) Qualifying critical mineral con-
tent.
(42) Qualified manufacturer.
(43) Recycling.
(i) In general.
(ii) Example: Recycling of applicable
critical mineral.
(44) Registered dealer.
(45) Section 30D regulations.
(46) Seller report.
(47) Time of sale.
(48) Total incremental value of battery
components.
(49) Total incremental value of North
American battery components.
(50) Total traced qualifying value.
(51) Total value of critical minerals.
(52) Total value of qualifying critical
minerals.
(53) Traced qualifying value.
(54) Value.
(55) Value added.
(56) Vehicle classification.
(i) In general.
(ii) Van.
(iii) Sport utility vehicle.
(iv) Pickup truck.
(v) Other vehicle.
(c) Severability.
(d) Applicability date.
§1.30D-3 Critical minerals and battery
components requirements.
(a) Critical minerals requirement.
(1) In general.
(2) Applicable critical minerals per-
centage.
(i) In general.
(ii) Vehicles placed in service between
April 18, 2023, and December 31, 2023.
(iii) Vehicles placed in service during
calendar year 2024.
(iv) Vehicles placed in service during
calendar year 2025.
(v) Vehicles placed in service during
calendar year 2026.
(vi) Vehicles placed in service during
calendar year 2027 and later.
(3) Determining qualifying critical
mineral content.
(i) In general.
(ii) Separate determinations required
for each procurement chain.
(iii) Time for determining value.
(iv) Application of qualifying critical
mineral content to vehicles.
(4) Temporary safe harbor for deter-
mining qualifying critical mineral content
for vehicles for which a qualified manu-
facturer submits a periodic written report
on or after May 6, 2024 and before Janu-
ary 1, 2027.
(i) In general.
(ii) Separate determinations required
for each procurement chain.
(iii) Time for determining value.
(iv) Application of qualifying critical
mineral content to vehicles.
(v) Consistent determination required
for all procurement chains.
(5) Rule for determining qualifying
critical mineral content for vehicles for
which a qualified manufacturer submit-
ted a periodic written report before May
6, 2024.
(b) Battery components requirement.
(1) In general.
(2) Applicable battery components per-
centage.
(i) In general.
(ii) Vehicles placed in service between
April 18, 2023, and December 31, 2023.
(iii) Vehicles placed in service during
calendar year 2024 or 2025.
(iv) Vehicles placed in service during
calendar year 2026.
(v) Vehicles placed in service during
calendar year 2027.
(vi) Vehicles placed in service during
calendar year 2028.
(vii) Vehicles placed in service in cal-
endar year 2029 and later.
(3) Determining qualifying battery
component content.
(i) In general.
(ii) Time for determining value.
(iii) Application of qualifying battery
component content to vehicles.
(iv) End point for determination.
(c) Definitions.
(1) Certain terms relevant to the critical
minerals requirement.
(i) Procurement chain.
(ii) Qualifying critical mineral.
(A) In general.
(B) Extracted or processed in the
United States or in any country with
which the United States has a free trade
agreement in effect.
(C) Recycled in North America.
(iii) Qualifying critical mineral con-
tent.
(iv) Total traced qualifying value.
(v) Total value of critical minerals.
(vi) Total value of qualifying critical
minerals.
(vii) Traced qualifying value.

Bulletin No. 2024–22 1297 May 28, 2024
(A) Extracted or processed in the
United States or in any country with
which the United States has a free trade
agreement in effect.
(B) Recycled in North America.
(viii) Value added.
(2) Certain terms relevant to the battery
components requirement.
(i) Incremental value.
(ii) North American battery compo-
nent.
(iii) Qualifying battery component
content.
(iv) Total incremental value of battery
components.
(v) Total incremental value of North
American battery components.
(d) Upfront review of critical minerals
and battery components requirements.
(e) New qualified fuel cell motor vehi-
cles.
(f) Examples.
(1) Example 1: Critical minerals
requirement.
(i) Facts.
(ii) Analysis.
(2) Example 2: Critical minerals
requirement temporary safe harbor.
(i) Facts.
(ii) Analysis.
(3) Example 3: Battery components
requirement.
(i) Facts.
(ii) Analysis.
(g) Severability.
(h) Applicability date.
(1) In general.
(2) Upfront review and traced qualify-
ing value.
§1.30D-4 Special rules.
(a) No double benefit.
(1) In general.
(2) Interaction between section 30D
and section 25E credits.
(3) Interaction between section 30D
and section 45W credits.
(b) Limitation based on modified
adjusted gross income.
(1) In general.
(2) Threshold amount.
(3) Special rule for change in filing sta-
tus.
(4) Application to estates and trusts.
(i) Estates and non-grantor trusts.
(ii) Grantor trusts.
(5) Application to passthrough entities.
(6) Other taxpayers.
(c) Credit may generally be claimed on
only one tax return.
(1) In general.
(2) Exception for passthrough entities.
(3) Seller reporting.
(i) In general.
(ii) Passthrough entities.
(4) Example.
(d) Grantor trusts.
(e) 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
credit transfer election.
(3) Example: Demonstrator vehicle.
(f) Seller registration.
(g) Requirement to file return.
(h) Taxpayer reliance on manufacturer
certifications and periodic written reports
to the IRS.
(i) Severability.
(j) Applicability date.
§1.30D-5 Transfer of credit.
(a) In general.
(b) Definitions.
(1) Advance payment program.
(2) Credit transfer election.
(3) Dealer.
(4) Dealer tax compliance.
(5) Electing taxpayer.
(6) Eligible entity.
(7) Incentive.
(8) Registered dealer.
(9) Sale price.
(10) Time of sale.
(c) Dealer registration.
(1) In general.
(2) Dealer tax compliance required.
(3) Suspension of registration.
(4) Revocation of registration.
(d) Credit transfer election by electing
taxpayer.
(e) Federal income tax consequences
of the credit transfer election.
(1) Tax consequences for electing tax-
payer.
(2) Tax consequences for eligible
entity.
(3) Form of payment from eligible
entity to electing taxpayer.
(4) Additional requirements.
(5) Examples.
(i) Example 1: Electing taxpayer’s reg-
ular tax liability less than amount of credit.
(A) Facts.
(B) Analysis.
(ii) Example 2: Non-cash payment by
eligible entity to electing taxpayer.
(A) Facts.
(B) Analysis.
(iii) Example 3: Eligible entity is a
partnership.
(A) Facts.
(B) Analysis.
(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 eli-
gibility.
(4) Revocation of registered dealer eli-
gibility.
(g) Increase in tax.
(1) Recapture if electing 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 electing taxpayer’s modified adjusted
gross income exceeds the limitation.
(3) Examples.
(i) Example 1: Registered dealer is not
an eligible entity.
(A) Facts.
(B) Analysis.
(ii) Example 2: Incorrect manufacturer
certifications.
(A) Facts.
(B) Analysis.
(h) Return requirement.
(i) Two credit transfer elections per
year.
(j) Severability.
(k) Applicability date.
§1.30D-6 Foreign entity of concern
restriction.
(a) In general.
(b) Due diligence required.
(1) In general.
(2) Transition rule for impractica-
ble-to-trace battery materials.
(c) FEOC compliance.
(1) In general.

May 28, 2024 1298 Bulletin No. 2024–22
(i) Step 1.
(ii) Step 2.
(iii) Step 3.
(2) FEOC-compliant batteries.
(3) FEOC-compliant battery cells.
(i) In general.
(ii) Allocation-based determination for
applicable critical minerals and associated
constituent materials of a battery cell.
(A) In general.
(B) Allocation limited to applicable
critical minerals in the battery cell.
(C) Separate allocation required for
each type of associated constituent mate-
rial.
(1) In general.
(2) Example.
(D) Allocation within each product line
of battery cells.
(E) Limitation on number of
FEOC-compliant battery cells.
(iii) Transition rule for impractica-
ble-to-trace battery materials.
(4) FEOC-compliant battery compo-
nents and applicable critical minerals.
(i) In general.
(ii) Timing of determination of FEOC
or FEOC-compliant status.
(iii) Example: Timing of FEOC com-
pliance determination.
(5) Third-party manufacturers or sup-
pliers.
(i) Due diligence required.
(ii) Provision of required information
to qualified manufacturer.
(iii) Contractual obligations.
(iv) Additional requirements in case of
multiple third-party manufacturers or sup-
pliers.
(d) Compliant-battery ledger.
(1) In general.
(2) Determination of number of batter-
ies.
(i) In general.
(ii) Upfront review.
(iii) Decrease or increase to compli-
ant-battery ledger.
(3) Tracking FEOC-compliant batter-
ies.
(4) Reconciliation of battery estimates.
(e) Rule for 2024.
(1) In general.
(2) Determination.
(f) Inaccurate attestations, certifica-
tions, or documentation.
(1) In general.
(2) Inadvertence.
(i) Inaccurate information may be
cured by qualified manufacturer.
(ii) Consequences if errors not cured.
(3) Intentional disregard or fraud.
(i) All vehicles ineligible for credit.
(ii) Termination of written agreement.
(g) Rules inapplicable to new qualified
fuel cell motor vehicles.
(h) Examples.
(1) Example 1: In general.
(i) Facts.
(ii) Analysis.
(2) Example 2: Rules for third-party
suppliers.
(i) Facts.
(ii) Analysis.
(3) Example 3: Applicable critical min-
erals.
(i) Facts.
(ii) Analysis.
(4) Example 4: Comprehensive exam-
ple.
(i) Facts.
(ii) Analysis.
(i) Severability.
(j) Applicability date.
§1.30D-1 Credit for new clean vehicles.
(a) In general. Section 30D(a) of the
Internal Revenue Code (Code) allows as
a credit against the tax imposed by chap-
ter 1 of the Code (chapter 1) for the tax-
able year of a taxpayer an amount equal
to the sum of the credit amounts deter-
mined under section 30D(b) with respect
to each new clean vehicle purchased by
the taxpayer that the taxpayer places in
service during the taxable year. This sec-
tion provides generally applicable rules
that apply for purposes of determining
the credit under section 30D and the sec-
tion 30D regulations (section 30D credit).
Section 1.30D-2 provides definitions
that apply for purposes of section 30D
and the section 30D regulations. Section
1.30D-3 provides rules regarding the
critical minerals and battery components
requirements of section 30D(e). Section
1.30D-4 provides guidance regarding
the limitations and special rules in sec-
tion 30D(f) as well as other special rules
with respect to the section 30D credit.
Section 1.30D-5 provides rules for the
credit transfer election and advance pay-
ment program and for recapture. Section
1.30D-6 provides rules regarding the for-
eign entities of concern (FEOC) restric-
tion of section 30D(d)(7).
(b) Application with other credits—(1)
Business credit treated as part of gen-
eral business credit. Section 30D(c)(1)
requires that so much of the section 30D
credit that would be allowed under sec-
tion 30D(a) for any taxable year (deter-
mined without regard to section 30D(c)
and this paragraph (b)) that is attributable
to a depreciable vehicle must be treated
as a general business credit under section
38 of the Code 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 use of which
is 50 percent or more business use in the
taxable year such vehicle is placed in ser-
vice, the section 30D credit that would
be allowed under section 30D(a) for that
taxable year (determined without regard
to section 30D(c) and this paragraph (b))
that is attributable to such depreciable
vehicle must be treated as a general busi-
ness credit under section 38(b)(30) for
such taxable year (and not allowed under
section 30D(a)). See paragraph (b)(2) of
this section for rules applicable in the case
of a depreciable vehicle the use of which
is less than 50 percent business use in the
taxable year such vehicle is placed in ser-
vice. See paragraph (b)(3) of this section
for rules applicable to a section 30D credit
allowed under section 30D(a) pursuant to
section 30D(c)(2) or paragraph (b)(2)(ii)
or (b)(3) of this section.
(2) Apportionment of section 30D
credit. Unless the taxpayer has elected
to transfer the credit pursuant to section
30D(g) and §1.30D-5(d), in the case of
a depreciable vehicle the business use of
which is less than 50 percent of a taxpay-
er’s total use of the vehicle for the taxable
year in which the vehicle is placed in ser-
vice, the taxpayer’s section 30D credit for
that taxable year with respect to that vehi-
cle must be apportioned as follows:
(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 paragraph (b)
(1) of this section (and not allowed under
section 30D(a) or paragraph (b)(3) of this
section).
(ii) The portion of the section 30D
credit corresponding to the percentage of

Bulletin No. 2024–22 1299 May 28, 2024
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) and paragraph (b)(3) of this
section.
(3) Personal credit limited based on
tax liability. Section 26 of the Code limits
the aggregate amount of credits allowed to
a taxpayer by subpart A of part IV of sub-
chapter A of chapter 1 (subpart A) based
on the taxpayer’s tax liability. Under sec-
tion 26(a), the aggregate amount of credits
allowed to a taxpayer by subpart A cannot
exceed the sum of the taxpayer’s regular
tax liability (as defined in section 26(b))
for the taxable year reduced by the foreign
tax credit allowable under section 27 of
the Code, and the alternative minimum tax
imposed by section 55(a) of the Code for
the taxable year. Section 30D(c)(2) pro-
vides that the section 30D credit allowed
under section 30D(a) for any taxable year
(determined after application of section
30D(c)(1) and paragraphs (b)(1) and (2)
of this section) is treated as a credit allow-
able under subpart A for such taxable year,
and the section 30D credit allowed under
section 30D(a) is therefore subject to the
limitation imposed by section 26.
(c) 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.
(d) Applicability date. This section
applies to taxable years ending after
December 4, 2023.
§1.30D-2 Definitions for purposes of
section 30D.
(a) In general. The definitions in this
section apply for purposes of section 30D
of the Internal Revenue Code (Code) and
the section 30D regulations.
(b) Definitions—(1) Advance pay-
ment program. Advance payment pro-
gram means advance payment program as
defined in §1.30D-5(b)(1).
(2) Applicable critical mineral—(i)
In general. Applicable critical mineral
means an applicable critical mineral as
defined in section 45X(c)(6) of the Code.
The requirements of §§1.30D-3(a) and
1.30D-6 with respect to an applicable crit-
ical mineral take into account each step
of extraction, processing, or recycling
through the step in which such mineral is
processed or recycled into a constituent
material, even if the mineral is not in a
form listed in section 45X(c)(6) at every
step of production. However, an applica-
ble critical mineral is disregarded for pur-
poses of the requirements of §§1.30D-3(a)
and 1.30D-6 if it is fully consumed in the
production of the constituent material or
battery component and no longer remains
in any form in the battery.
(ii) Example: Form of applicable critical min-
eral. Mineral Y is extracted and is intended to be
incorporated into the battery of an electric vehicle.
Mineral Y is not in a form listed in section 45X(c)
(6) at the time of such extraction, but subsequently
it is refined into an applicable critical mineral form
listed in section 45X(c)(6). Both the extraction and
processing are taken into account for purposes of the
requirements of §§1.30D-3(a) and 1.30D-6.
(3) Assembly. Assembly, with respect
to battery components, means the process
of combining battery components into
battery cells and battery modules.
(4) Associated constituent material.
Associated constituent material, with
respect to an applicable critical mineral,
means a constituent material that has been
processed or recycled from such mineral
into the constituent material with which
it is associated, even if that processing or
recycling transformed such mineral into a
form not listed in section 45X(c)(6).
(5) Battery. Battery, for purposes of
a new clean vehicle, means a collection
of one or more battery modules, each of
which has two or more electrically config-
ured battery cells in series or parallel, to
create voltage or current. The term battery
does not include items such as thermal
management systems or other parts of a
battery cell or module that do not directly
contribute to the electrochemical storage
of energy within the battery, such as bat-
tery cell cases, cans, or pouches.
(6) Battery cell. Battery cell means a
combination of battery components (other
than battery cells) capable of electrochem-
ically storing energy from which the elec-
tric motor of a new clean vehicle draws
electricity.
(7) Battery cell production facility.
Battery cell production facility means a
facility in which battery cells are manu-
factured or assembled.
(8) Battery component. Battery compo-
nent means a component that forms part
of a clean vehicle battery and that is man-
ufactured or assembled from one or more
components or battery materials that are
combined through industrial, chemical,
and physical assembly steps. Battery com-
ponents may include, but are not limited
to, a cathode electrode, anode electrode,
solid metal electrode, coated separator,
liquid electrolyte, solid state electrolyte,
battery cell, and battery module.
(9) Battery materials. Battery materials
means direct and indirect inputs to battery
components that are produced through
processing rather than through manufac-
turing or assembly. Battery materials are
not considered a type of battery compo-
nent, although battery materials may be
manufactured or assembled into battery
components. The three categories of bat-
tery materials are applicable critical min-
erals, constituent materials, and battery
materials without applicable critical min-
erals. Examples of battery materials that
may or may not contain applicable critical
minerals include a separator base film (if
not manufactured or assembled) and sep-
arator coating. Examples of battery mate-
rials without applicable critical minerals
include conductive additives, copper foils
prior to graphite deposition, and electro-
lyte solvents.
(10) Clean vehicle battery. Clean vehi-
cle battery, with respect to a new clean
vehicle, means the battery from which the
electric motor of the vehicle draws elec-
tricity to propel such vehicle.
(11) Compliant-battery ledger. A com-
pliant-battery ledger, for a qualified man-
ufacturer for a calendar year, is a ledger
established under the rules of §1.30D-
6(d) that tracks the number of available
FEOC-compliant batteries for such calen-
dar year.
(12) Constituent materials. Constit-
uent materials means battery materials
that contain applicable critical miner-
als. Constituent materials may include,
but are not limited to, powders of cath-
ode active materials, powders of anode
active materials, foils, metals for solid
electrodes, binders, electrolyte salts, and
electrolyte additives, as required for a
battery cell. Battery materials without
applicable critical minerals are not con-
stituent materials.
(13) Country with which the United
States has a free trade agreement in

May 28, 2024 1300 Bulletin No. 2024–22
effect—(i) In general. The term country
with which the United States has a free
trade agreement in effect means any of
those countries identified in paragraph (b)
(13)(ii) of this section or that the Secretary
of the Treasury or her delegate (Secretary)
may identify in the future. The criteria
the Secretary will consider in determin-
ing whether to identify a country under
this paragraph (b)(13) include whether
an agreement between the United States
and that country, as to the critical min-
erals contained in clean vehicle batteries
or more generally, and in the context of
the overall commercial and economic
relationship between that country and the
United States:
(A) Reduces or eliminates trade barri-
ers on a preferential basis;
(B) Commits the parties to refrain from
imposing new trade barriers;
(C) Establishes high-standard disci-
plines in key areas affecting trade (such
as core labor and environmental protec-
tions); and/or
(D) Reduces or eliminates restric-
tions on exports or commits the parties to
refrain from imposing such restrictions.
(ii) Free trade agreements in effect.
The countries with which the United
States currently has free trade agreements
in effect are: Australia, Bahrain, Canada,
Chile, Colombia, Costa Rica, Dominican
Republic, El Salvador, Guatemala, Hon-
duras, Israel, Japan, Jordan, South Korea,
Mexico, Morocco, Nicaragua, Oman,
Panama, Peru, and Singapore.
(iii) Updates. The list of countries in
paragraph (b)(13)(ii) of this section may
be revised and updated through guidance
published in the Federal Register or in the
Internal Revenue Bulletin (see §601.601
of this chapter).
(14) Credit transfer election. Credit
transfer election means credit transfer
election as defined in §1.30D-5(b)(2).
(15) Dealer. Dealer means dealer as
defined in §1.30D-5(b)(3).
(16) Dealer tax compliance. Dealer tax
compliance means dealer tax compliance
as defined in §1.30D-5(b)(4).
(17) Depreciable vehicle. Depreciable
vehicle means a vehicle of a character
subject to an allowance for depreciation.
(18) Electing taxpayer. Electing tax-
payer means electing taxpayer as defined
in §1.30D-5(b)(5).
(19) Eligible entity. Eligible entity
means eligible entity as defined in §1.30D-
5(b)(6).
(20) Excessive payment. Excessive
payment means excessive payment as
defined in §1.30D-5(g)(2)(iii).
(21) Extraction. Extraction means the
activities performed to harvest minerals
or natural resources from the ground or
from a body of water. Extraction includes,
but is not limited to, operating equipment
to harvest minerals or natural resources
from mines and wells and the physical
processes involved in refining. Extraction
also includes operating equipment to
extract minerals or natural resources from
the waste or residue of prior extraction,
including crude oil extraction to the extent
that processes applied to that crude oil
yield an applicable critical mineral as a
byproduct. Extraction concludes when
activities are performed to convert raw
mined or harvested products or raw well
effluent to substances that can be readily
transported or stored for direct use in crit-
ical mineral processing. Extraction does
not include activities that begin with a
recyclable commodity (as such activities
are recycling). Extraction does not include
the chemical and thermal processes
involved in refining.
(22) FEOC-compliant. FEOC-compli-
ant means in compliance with the appli-
cable excluded entity requirement under
section 30D(d)(7). In particular—
(i) A battery component (other than a
battery cell), with respect to a new clean
vehicle placed in service after December
31, 2023, is FEOC-compliant if it is not
manufactured or assembled by a FEOC;
(ii) An applicable critical mineral, with
respect to a new clean vehicle placed
in service after December 31, 2024, is
FEOC-compliant if it is not extracted, pro-
cessed, or recycled by a FEOC;
(iii) A battery cell, with respect to a
new clean vehicle placed in service after
December 31, 2023, and before January 1,
2025, is FEOC-compliant if it is not man-
ufactured or assembled by a FEOC and
it contains only FEOC-compliant battery
components;
(iv) A battery cell, with respect to a
new clean vehicle placed in service after
December 31, 2024, is FEOC-compliant if
it is not manufactured or assembled by a
FEOC and it contains only FEOC-compli-
ant battery components and FEOC-com-
pliant applicable critical minerals; and
(v) A clean vehicle battery, with respect
to a new clean vehicle placed in service
after December 31, 2023, is FEOC-com-
pliant if it contains only FEOC-compliant
battery components (other than battery
cells) and FEOC-compliant battery cells
(as described in paragraph (b)(22)(iii) or
(iv) of this section, as applicable).
(23) Final assembly. Final assembly
means the process by which a manufac-
turer produces a new clean vehicle at, or
through the use of, a plant, factory, or other
place from which the vehicle is delivered
to a dealer or importer with all compo-
nent parts necessary for the mechanical
operation of the vehicle included with
the vehicle, whether or not the compo-
nent parts are permanently installed in or
on the vehicle. To establish where final
assembly of a new clean vehicle occurred
for purposes of the requirement in section
30D(d)(1)(G) that final assembly of a new
clean vehicle occur within North America,
the taxpayer may rely on the following
information:
(i) The vehicle’s plant of manufacture
as reported in the vehicle identification
number pursuant to 49 CFR 565; or
(ii) The final assembly point reported
on the label affixed to the vehicle as
described in 49 CFR 583.5(a)(3).
(24) Foreign entity of concern. For-
eign entity of concern (FEOC) has the
meaning provided in section 40207(a)(5)
of the Infrastructure Investment and Jobs
Act (42 U.S.C. 18741(a)(5)) and guidance
promulgated thereunder by the Depart-
ment of Energy (DOE).
(25) Impracticable-to-trace battery
materials—(i) In general. Impractica-
ble-to-trace battery materials means
specifically identified, low-value battery
materials that originate from multiple
sources and are commingled during refin-
ing, processing, or other production pro-
cesses by suppliers to such a degree that
the qualified manufacturer cannot, due to
current industry practice, feasibly deter-
mine and attest to the origin of such bat-
tery materials. For this purpose, impracti-
cable-to-trace battery materials are those
that have low value compared to the total
value of the clean vehicle battery.
(ii) Identified impracticable-to-trace
battery materials. Identified impracti-

Bulletin No. 2024–22 1301 May 28, 2024
cable-to-trace battery materials means
applicable critical minerals in the follow-
ing circumstances: graphite contained in
anode materials, and applicable critical
minerals contained in electrolyte salts,
electrode binders, or electrolyte additives.
(26) Incentive. Incentive means incen-
tive as defined in §1.30D-5(b)(7).
(27) Incremental value. Incremental
value means incremental value as defined
in §1.30D-3(c)(2)(i).
(28) Manufacturer—(i) In general. A
manufacturer means any manufacturer
within the meaning of the regulations pre-
scribed by the Administrator of the Envi-
ronmental Protection Agency (EPA) for
purposes of the administration of title II
of the Clean Air Act (42 U.S.C. 7521 et
seq.) and as defined in 42 U.S.C. 7550(1).
Except as provided in paragraph (b)(28)
(ii) of this section, if multiple manufac-
turers are involved in the production of
a vehicle, the requirements of section
30D(d)(3) must be met by the manufac-
turer that satisfies the reporting require-
ments of the greenhouse gas emissions
standards set by the EPA under the Clean
Air Act (42 U.S.C. 7521 et seq.) for the
subject vehicle.
(ii) Modification of a new motor vehi-
cle—(A) If a manufacturer modifies a new
motor vehicle (as defined in 42 U.S.C.
7550(3)) that does not satisfy the require-
ments of section 30D(d)(1)(F) or (d)(6)
so that the new motor vehicle, after mod-
ification, does satisfy such requirements,
then such manufacturer may satisfy the
requirements of section 30D(d)(3) if the
modification occurred prior to the new
motor vehicle being placed in service.
(B) If a manufacturer modifies a new
motor vehicle (as defined in 42 U.S.C.
7550(3)) that does not satisfy the require-
ments of 45W(c)(3) so that the new motor
vehicle, after modification, does satisfy
such requirements, then such manufac-
turer may satisfy the requirements of
30D(d)(3) if the modification occurred
prior to the new motor vehicle being
placed in service.
(29) Manufacturer’s suggested retail
price—(i) In general. Manufacturer’s
suggested retail price means the sum of
the retail price and the retail delivered
price (as defined in paragraphs (b)(29)(ii)
and (iii) of this section) as reported on the
label that is affixed to the windshield or
side window of the vehicle, as described
in 15 U.S.C. 1232.
(ii) Retail price. Retail price, for pur-
poses of paragraph (b)(29)(i) of this sec-
tion, means the retail price of the auto-
mobile suggested by the manufacturer as
described in 15 U.S.C. 1232(f)(1).
(iii) Retail delivered price. Retail deliv-
ered price, for purposes of paragraph (b)
(29)(i) of this section, means the retail
delivered price suggested by the man-
ufacturer for each accessory or item of
optional equipment physically attached to
such automobile at the time of its delivery
to the dealer that is not included within the
price of such automobile as stated pursu-
ant to 15 U.S.C. 1232(f)(1), as described
in 15 U.S.C. 1232(f)(2).
(30) Manufacturing. Manufacturing,
with respect to a battery component,
means the industrial and chemical steps
taken to produce a battery component.
(31) Modified adjusted gross income—
(i) Individuals. Modified adjusted gross
income, in the case of an individual,
means adjusted gross income (as defined
in section 62 of the Code) increased by
any amount excluded from gross income
under section 911, 931, or 933 of the Code.
(ii) Estates and trusts. Modified
adjusted gross income, in the case of an
estate or non-grantor trust, means adjusted
gross income (as defined in section 67(e)
of the Code).
(32) New clean vehicle. New clean
vehicle means a vehicle that meets the
requirements described in section 30D(d).
Vehicles that may qualify as new clean
vehicles include battery electric vehicles,
plug-in hybrid electric vehicles, fuel cell
motor vehicles, and plug-in hybrid fuel
cell motor vehicles. A vehicle does not
meet the requirements of section 30D(d)
if—
(i) The qualified manufacturer fails to
provide a periodic written report for such
vehicle prior to the vehicle being placed
in service reporting the vehicle identifica-
tion number of such vehicle and certifying
compliance with the requirement of sec-
tion 30D(d);
(ii) The qualified manufacturer pro-
vides incorrect information with respect
to the periodic written report for such
vehicle;
(iii) The qualified manufacturer fails
to update its periodic written report in the
event of a material change with respect to
such vehicle; or
(iv) For new clean vehicles placed
in service after December 31, 2024, the
qualified manufacturer fails to meet the
requirements of §1.30D-6(d).
(33) New qualified fuel cell motor vehi-
cle. New qualified fuel cell motor vehicle
means any new qualified fuel cell motor
vehicle (as defined in section 30B(b)(3))
that meets the requirements under section
30D(d)(1)(G) (that is, the final assembly
in North America requirement) and (H)
(that is, the seller report requirement), and
that does not have a clean vehicle battery.
(34) North America. North America
means the territory of the United States,
Canada, and Mexico as defined in 19 CFR
part 182, Appendix A, § 1(1).
(35) North American battery compo-
nent. North American battery component
means North American battery compo-
nent as defined in §1.30D-3(c)(2)(ii).
(36) Placed in service. A new clean
vehicle is considered to be placed in ser-
vice on the date the taxpayer takes posses-
sion of the vehicle.
(37) Processing. Processing means
the non-physical processes involved in
the refining of non-recycled substances
or materials, including the treating, bak-
ing, and coating processes used to convert
such substances and materials into con-
stituent materials. Processing includes the
chemical or thermal processes involved in
refining. Processing does not include the
physical processes involved in refining.
(38) Procurement chain. Procurement
chain means procurement chain as defined
in §1.30D-3(c)(1)(i).
(39) Qualifying battery component
content. Qualifying battery component
content means qualifying battery compo-
nent content as defined in §1.30D-3(c)(2)
(iii).
(40) Qualifying critical mineral. Qual-
ifying critical mineral means qualifying
critical mineral as defined in §1.30D-3(c)
(1)(ii).
(41) Qualifying critical mineral con-
tent. Qualifying critical mineral content
means qualifying critical mineral content
as defined in §1.30D-3(c)(1)(iii).
(42) Qualified manufacturer. A quali-
fied manufacturer means a manufacturer
that meets the requirements described in
section 30D(d)(3) at the time the manu-

May 28, 2024 1302 Bulletin No. 2024–22
facturer submits a periodic written report
to the IRS under a written agreement
described in section 30D(d)(3). The term
qualified manufacturer does not include
any manufacturer whose qualified man-
ufacturer status has been terminated by
the IRS. The IRS may terminate qualified
manufacturer status for fraud, intentional
disregard, or gross negligence with respect
to any requirements of section 30D, the
section 30D regulations, or any guidance
under section 30D, including with respect
to the periodic written reports described in
section 30D(d)(3) and paragraph (b)(32)
of this section and any attestations, doc-
umentation, or certifications described in
§§1.30D-3(d) and 1.30D-6(d), at the time
and in the manner provided in the Inter-
nal Revenue Bulletin (see §601.601 of this
chapter). See §1.30D-6(f) for additional
rules regarding inaccurate determinations
and documentation. The IRS may also ter-
minate qualified manufacturer status for
fraud, intentional disregard, or gross neg-
ligence with respect to any requirement of
section 25E or section 45W or any regula-
tions thereunder.
(43) Recycling—(i) In general. Recy-
cling means the series of activities during
which recyclable materials containing crit-
ical minerals are transformed into specifi-
cation-grade commodities and consumed
in lieu of virgin materials to create new
constituent materials; such activities result
in new constituent materials contained
in the clean vehicle battery. All physi-
cal, chemical, and thermal treatments or
modifications that convert recycled feed-
stocks to specification grade constituent
materials are included in recycling. How-
ever, recycled applicable critical minerals
and associated constituent materials are
only subject to the requirements under
§§1.30D-3(a) and 1.30D-6 if the recycla-
ble material contains an applicable critical
mineral, contains material that was trans-
formed from an applicable critical min-
eral, or if the recyclable material is used
to produce an applicable critical mineral
at any point during the recycling process.
The requirements under §§1.30D-3(a) and
1.30D-6 only take into account activities
that occurred during the recycling process.
(ii) Example: Recycling of applicable critical
mineral. Mineral Z, an applicable critical mineral
in a form listed in section 45X(c)(6), was processed
by A in a prior production process. Mineral Z sub-
sequently was derived from recyclable material in a
form not listed in section 45X(c)(6). Mineral Z was
recycled by B. The requirements under §§1.30D-3
and 1.30D-6 only take into account the activities
conducted by B.
(44) Registered dealer. Registered
dealer means registered dealer as defined
in §1.30D-5(b)(8).
(45) Section 30D regulations. Section
30D regulations means §1.30D-1, this
section, and §§1.30D-3 through 1.30D-6.
(46) Seller report. Seller report means
the report described in section 30D(d)(1)
(H) that the seller of a new clean vehicle
provides to the taxpayer and the IRS in
the manner provided in, and containing
the information described in, guidance
published in the Internal Revenue Bulletin
(see §601.601 of this chapter). The seller
report must be transmitted to the IRS elec-
tronically. The term seller report does not
include a report rejected by the IRS due
to the information contained therein not
matching IRS records.
(47) Time of sale. Time of sale means
time of sale as defined in §1.30D-5(b)(9).
(48) Total incremental value of battery
components. Total incremental value of
battery components means total incremen-
tal value of battery components as defined
in §1.30D-3(c)(2)(iv).
(49) Total incremental value of North
American battery components. Total
incremental value of North American bat-
tery components means total incremental
value of North American battery compo-
nents as defined in §1.30D-3(c)(2)(v).
(50) Total traced qualifying value.
Total traced qualifying value means total
traced qualifying value as defined in
§1.30D-3(c)(1)(iv).
(51) Total value of critical minerals.
Total value of critical minerals means
total value of critical minerals as defined
in §1.30D-3(c)(1)(v).
(52) Total value of qualifying critical
minerals. Total value of qualifying critical
minerals means total value of qualifying
critical minerals as defined in §1.30D-3(c)
(1)(vi).
(53) Traced qualifying value. Traced
qualifying value means traced qualifying
value as defined in §1.30D-3(c)(1)(vii).
(54) Value. Value, with respect to prop-
erty, means the arm’s-length price that
was paid or would be paid for the property
by an unrelated purchaser determined in
accordance with the principles of section
482 of the Code and regulations thereun-
der.
(55) Value added. Value added means
value added as defined in §1.30D-3(c)(1)
(viii).
(56) Vehicle classification—(i) In
general. Vehicle classification means
the vehicle classification of a new clean
vehicle determined consistent with the
rules and definitions provided in 40 CFR
600.315-08 and this paragraph (b)(56) for
vans, sport utility vehicles, pickup trucks,
and other vehicles.
(ii) Va n. Van means a vehicle classi-
fied as a van or minivan under 40 CFR
600.315-08(a)(2)(iii) and (iv), or other-
wise so classified by the Administrator
of the EPA pursuant to 40 CFR 600.315-
08(a).
(iii) Sport utility vehicle. Sport util-
ity vehicle means a vehicle classified
as a small sport utility vehicle or stan-
dard sport utility vehicle under 40 CFR
600.315-08(a)(2)(v) and (vi), or otherwise
so classified by the Administrator of the
EPA pursuant to 40 CFR 600.315-08(a).
(iv) Pickup truck. Pickup truck means
a vehicle classified as a small pickup truck
or standard pickup truck under 40 CFR
600.315-08(a)(2)(i) and (ii), or otherwise
so classified by the Administrator of the
EPA pursuant to 40 CFR 600.315-08(a).
(v) Other vehicle. Other vehicle means
any vehicle classified in one of the classes
of passenger automobiles listed in 40 CFR
600.315-08(a)(1), or otherwise so classi-
fied by the Administrator of the EPA pur-
suant to 40 CFR 600.315-08(a).
(c) 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.
(d) Applicability date. This section
applies to taxable years ending after
December 4, 2023.
§1.30D-3 Critical minerals and battery
components requirements.
(a) Critical minerals requirement—(1)
In general. The critical minerals require-
ment described in section 30D(e)(1)(A) of
the Internal Revenue Code (Code), with
respect to a clean vehicle battery, is met
if the qualifying critical mineral content

Bulletin No. 2024–22 1303 May 28, 2024
of such battery is equal to or greater than
the applicable critical minerals percentage
(as defined in paragraph (a)(2) of this sec-
tion), as certified by the qualified manu-
facturer, in such form or manner as pre-
scribed by the Secretary of the Treasury or
her delegate (Secretary).
(2) Applicable critical minerals per-
centage—(i) In general. For purposes
of paragraph (a)(1) of this section, the
applicable critical minerals percentage,
which is based on the year in which a
vehicle is placed in service by the tax-
payer, is set forth in paragraphs (a)(2)(ii)
through (vi) of this section. See section
30D(e)(1)(B).
(ii) Vehicles placed in service between
April 18, 2023, and December 31, 2023.
In the case of a vehicle placed in service
after April 17, 2023, and before January 1,
2024, the applicable critical minerals per-
centage is 40 percent.
(iii) Vehicles placed in service during
calendar year 2024. In the case of a vehi-
cle placed in service during calendar year
2024, the applicable critical minerals per-
centage is 50 percent.
(iv) Vehicles placed in service during
calendar year 2025. In the case of a vehi-
cle placed in service during calendar year
2025, the applicable critical minerals per-
centage is 60 percent.
(v) Vehicles placed in service during
calendar year 2026. In the case of a vehi-
cle placed in service during calendar year
2026, the applicable critical minerals per-
centage is 70 percent.
(vi) Vehicles placed in service during
calendar year 2027 and later. In the case
of a vehicle placed in service after Decem-
ber 31, 2026, the applicable critical miner-
als percentage is 80 percent.
(3) Determining qualifying critical
mineral content—(i) In general. Qualify-
ing critical mineral content with respect to
a clean vehicle battery is calculated as the
percentage that results from dividing:
(A) The total traced qualifying value,
by
(B) The total value of critical minerals.
(ii) Separate determinations required
for each procurement chain. The traced
qualifying value of an applicable critical
mineral, including the percentage or per-
centages necessary to determine the traced
qualifying value, must be determined sep-
arately for each procurement chain.
(iii) Time for determining value. A
qualified manufacturer must select a date
for determining the values described in
paragraphs (a)(3)(i)(A) and (B) of this
section. Such date must be after the final
processing or recycling step for the appli-
cable critical minerals relevant to the cer-
tification described in section 30D(e)(1)
(A).
(iv) Application of qualifying critical
mineral content to vehicles. A qualified
manufacturer may determine qualify-
ing critical mineral content based on the
value of the applicable critical minerals
actually contained in the clean vehicle
battery of a specific vehicle. Alternatively,
for purposes of calculating the qualifying
critical mineral content for clean vehicle
batteries in a group of vehicles, a quali-
fied manufacturer may average the qual-
ifying critical mineral content under this
paragraph (a)(3)(iv) over a period of time
(for example, a year, a calendar quarter,
or a month) with respect to vehicles from
the same model line, plant, class, or some
combination thereof, with final assembly
(as defined in section 30D(d)(5) of the
Code and §1.30D-2(b)(23)) within North
America.
(4) Temporary safe harbor for deter-
mining qualifying critical mineral content
for vehicles for which a qualified manu-
facturer submits a periodic written report
on or after May 6, 2024 and before Janu-
ary 1, 2027—(i) In general. For vehicles
for which a qualified manufacturer sub-
mits a periodic written report on or after
May 6, 2024 and before January 1, 2027,
qualifying critical mineral content with
respect to a clean vehicle battery may be
calculated as the percentage that results
from dividing:
(A) The total value of qualifying criti-
cal minerals, by
(B) The total value of critical minerals.
(ii) Separate determinations required
for each procurement chain. The portion
of an applicable critical mineral that is a
qualifying critical mineral must be deter-
mined separately for each procurement
chain.
(iii) Time for determining value. A
qualified manufacturer must select a date
for determining the values described in
paragraphs (a)(4)(i)(A) and (B) of this
section. Such date must be after the final
processing or recycling step for the appli-
cable critical minerals relevant to the cer-
tification described in section 30D(e)(1)
(A).
(iv) Application of qualifying critical
mineral content to vehicles. A qualified
manufacturer may determine qualify-
ing critical mineral content based on the
value of the applicable critical minerals
actually contained in the clean vehicle
battery of a specific vehicle. Alternatively,
for purposes of calculating the qualifying
critical mineral content for clean vehicle
batteries in a group of vehicles, a quali-
fied manufacturer may average the qual-
ifying critical mineral content calculation
over a period of time (for example, a year,
quarter, or month) with respect to vehicles
from the same model line, plant, class, or
some combination of thereof, with final
assembly (as defined in section 30D(d)(5)
of the Code and §1.30D-2(b)(23)) within
North America.
(v) Consistent determination required
for all procurement chains. A qualified
manufacturer that makes a determination
under this paragraph (a)(4) must use the
rules of this paragraph for all procure-
ment chains of the clean vehicle battery.
If a qualified manufacturer averages qual-
ifying critical mineral content as described
in paragraph (a)(4)(iv) of this section, the
qualified manufacturer must use the rules
of such paragraph for all procurement
chains for all clean vehicle batteries in the
group of vehicles. Therefore, the qualified
manufacturer may not use the rules of para-
graph (a)(3) for some procurement chains
and the rules of paragraph (a)(4) for other
procurement chains for the same clean
vehicle battery or clean vehicle batteries in
the group of vehicles, as applicable.
(5) Rule for determining qualifying
critical mineral content for vehicles for
which a qualified manufacturer submitted
a periodic written report before May 6,
2024. For vehicles for which a qualified
manufacturer submitted a periodic written
report before May 6, 2024, qualifying crit-
ical mineral content with respect to a clean
vehicle battery must be calculated using
the method described in paragraph (a)(4)
of this section.
(b) Battery components requirement—
(1) In general. The battery components
requirement described in section 30D(e)
(2)(A), with respect to a clean vehicle bat-
tery, is met if the qualifying battery com-

May 28, 2024 1304 Bulletin No. 2024–22
ponent content of such battery is equal
to or greater than the applicable battery
components percentage (as defined in
paragraph (b)(2) of this section), as certi-
fied by the qualified manufacturer, in such
form or manner as prescribed by the Sec-
retary.
(2) Applicable battery components per-
centage—(i) In general. For purposes of
paragraph (b)(1) of this section, section
30D(e)(2)(B) provides the applicable
battery components percentage, which is
based on the year in which a vehicle is
placed in service by the taxpayer as set
forth in paragraphs (b)(2)(ii) through (vii)
of this section.
(ii) Vehicles placed in service between
April 18, 2023, and December 31, 2023.
In the case of a vehicle placed in service
after April 17, 2023, and before January 1,
2024, the applicable battery components
percentage is 50 percent.
(iii) Vehicles placed in service during
calendar year 2024 or 2025. In the case of
a vehicle placed in service during calendar
year 2024 or 2025, the applicable battery
components percentage is 60 percent.
(iv) Vehicles placed in service during
calendar year 2026. In the case of a vehi-
cle placed in service during calendar year
2026, the applicable battery components
percentage is 70 percent.
(v) Vehicles placed in service during
calendar year 2027. In the case of a vehi-
cle placed in service during calendar year
2027, the applicable battery components
percentage is 80 percent.
(vi) Vehicles placed in service during
calendar year 2028. In the case of a vehi-
cle placed in service during calendar year
2028, the applicable battery components
percentage is 90 percent.
(vii) Vehicles placed in service in cal-
endar year 2029 and later. In the case of
a vehicle placed in service after December
31, 2028, the applicable battery compo-
nents percentage is 100 percent.
(3) Determining qualifying battery
component content—(i) In general. Qual-
ifying battery component content with
respect to a clean vehicle battery of the
vehicle is calculated as the percentage that
results from dividing—
(A) The total incremental value of
North American battery components, by
(B) The total incremental value of bat-
tery components.
(ii) Time for determining value. A
qualified manufacturer must select a date
for determining the incremental values
described in paragraphs (b)(3)(i)(A) and
(B) of this section. Such date must be after
the last manufacturing or assembly step
for the battery components relevant to the
certification described in section 30D(e)
(2)(A).
(iii) Application of qualifying battery
component content to vehicles. A quali-
fied manufacturer may determine qual-
ifying battery component content based
on the incremental values of the battery
components actually contained in the
clean vehicle battery of a specific vehicle.
Alternatively, for purposes of calculating
the qualifying battery component content
for clean vehicle batteries in a group of
vehicles, a qualified manufacturer may
average the qualifying battery component
content calculation over a period of time
(for example, a year, quarter, or month)
with respect to vehicles from the same
model line, plant, class, or some combi-
nation of thereof, with final assembly (as
defined in section 30D(d)(5) of the Code
and §1.30D-2(b)(23)) within North Amer-
ica.
(iv) End point for determination. For a
clean vehicle battery that contains a bat-
tery module or modules containing battery
cells, the calculation under this paragraph
(b) takes into account the value of the
module and battery components contained
in the module. In the case of a clean vehi-
cle battery that contains battery cells but
no battery modules, the calculation under
this paragraph (b) takes into account the
value of the battery cells and battery com-
ponents contained in the battery cells.
(c) Definitions—(1) Certain terms rel-
evant to the critical minerals requirement.
The following definitions apply for pur-
poses of the rules of section 30D(e)(1) and
paragraph (a) of this section:
(i) Procurement chain. Procurement
chain means a common sequence of
extraction, processing, or recycling activ-
ities that occur in a common set of loca-
tions with respect to an applicable critical
mineral, concluding in the production of
constituent materials. Sources of a single
applicable critical mineral may have mul-
tiple procurement chains if, for example,
one source of the applicable critical min-
eral undergoes the same extraction, pro-
cessing, or recycling process in different
locations.
(ii) Qualifying critical mineral—(A)
In general. Qualifying critical mineral
means an applicable critical mineral that
is extracted or processed in the United
States, or in any country with which the
United States has a free trade agreement in
effect, or that is recycled in North Amer-
ica.
(B) Extracted or processed in the
United States or in any country with which
the United States has a free trade agree-
ment in effect. An applicable critical min-
eral is extracted or processed in the United
States, or in any country with which the
United States has a free trade agreement
in effect, if:
(1) Fifty percent or more of the value
added to the applicable critical mineral by
extraction is derived from extraction that
occurred in the United States or in any
country with which the United States has
a free trade agreement in effect; or
(2) Fifty percent or more of the value
added to the applicable critical mineral
by processing is derived from processing
that occurred in the United States or in any
country with which the United States has a
free trade agreement in effect.
(C) Recycled in North America. An
applicable critical mineral is recycled in
North America if 50 percent or more of
the value added to the applicable critical
mineral by recycling is derived from recy-
cling that occurred in North America.
(iii) Qualifying critical mineral con-
tent. Qualifying critical mineral content
means the percentage of the value of the
applicable critical minerals contained in a
clean vehicle battery that is extracted or
processed in the United States, or in any
country with which the United States has
a free trade agreement in effect, or that is
recycled in North America.
(iv) Total traced qualifying value. Total
traced qualifying value means the sum of
the traced qualifying values of all applica-
ble critical minerals contained in a clean
vehicle battery.
(v) Total value of critical minerals.
Total value of critical minerals means the
sum of the values of all applicable criti-
cal minerals contained in a clean vehicle
battery.
(vi) Total value of qualifying critical
minerals. Total value of qualifying criti-

Bulletin No. 2024–22 1305 May 28, 2024
cal minerals means the sum of the values
of all the qualifying critical minerals con-
tained in a clean vehicle battery.
(vii) Traced qualifying value—(A)
Extracted or processed in the United
States or in any country with which the
United States has a free trade agreement
in effect. Traced qualifying value means,
with respect to an applicable critical min-
eral that is extracted and processed into
a constituent material, the value of the
applicable critical mineral multiplied by
the greater of:
(1) The value added to the applicable
critical mineral by extraction that occurred
in the United States or in any country with
which the United States has a free trade
agreement in effect, divided by the total
value added by from extraction of the
applicable critical mineral; or
(2) The value added to the applica-
ble critical mineral by processing that
occurred in the United States or in any
country with which the United States has
a free trade agreement in effect, divided
by the total value added by processing of
the applicable critical mineral.
(B) Recycled in North America. Traced
qualifying value means, with respect to an
applicable critical mineral that is recycled
into a constituent material, the value of
the applicable critical mineral multiplied
by the percentage obtained by dividing the
value added to the applicable critical min-
eral by recycling that occurred in North
America by the total value added by recy-
cling of the applicable critical mineral.
(viii) Value added. Value added, with
respect to recycling, extraction, or pro-
cessing of an applicable critical mineral,
means the increase in the value of the
applicable critical mineral attributable to
the relevant activity. In the case of mul-
tiple applicable critical mineral procure-
ment chains that are part of the same pro-
cessing or recycling activity, value added
should be allocated to each procurement
chain based on relative mass.
(2) Certain terms relevant to the bat-
tery components requirement. The follow-
ing definitions apply for purposes of the
rules of section 30D(e)(2) and paragraph
(b) of this section:
(i) Incremental value. Incremental
value, with respect to a battery compo-
nent, means the value determined by
subtracting from the value of that battery
component the value of the manufactured
or assembled battery components, if any,
that are contained in that battery compo-
nent.
(ii) North American battery compo-
nent. North American battery component
means a battery component substantially
all of the manufacturing or assembly of
which occurs in North America, without
regard to the location of the manufactur-
ing or assembly activities of any compo-
nents that make up the particular battery
component.
(iii) Qualifying battery component
content. Qualifying battery component
content means the percentage of the value
of the battery components contained in a
clean vehicle battery that were manufac-
tured or assembled in North America.
(iv) Total incremental value of battery
components. Total incremental value of
battery components means the sum of the
incremental values of each battery compo-
nent contained in a clean vehicle battery.
(v) Total incremental value of North
American battery components. Total
incremental value of North American bat-
tery components means the sum of the
incremental values of each North Amer-
ican battery component contained in a
clean vehicle battery.
(d) Upfront review of critical minerals
and battery components requirements.
For new clean vehicles anticipated to be
placed in service after December 31, 2024,
the qualified manufacturer must provide
attestations, certifications, and documen-
tation demonstrating compliance with the
requirements of section 30D(e), at the
time and in the manner provided in the
Internal Revenue Bulletin (see §601.601
of this chapter). The IRS, with analytical
assistance from the Department of Energy,
will review the attestations, certifications,
and documentation.
(e) New qualified fuel cell motor vehi-
cles. The requirements of section 30D(e)
and this section are deemed to be satis-
fied with respect to new qualified fuel cell
motor vehicles. The amount of the credit
with respect to such vehicles, under sec-
tion 30D(b), is $7,500.
(f) Examples. The following examples
illustrate the rules of this section.
(1) Example 1: Critical minerals requirement—
(i) Facts. In 2028, Company A uses a clean vehicle
battery that contains three applicable critical miner-
als, which are used for the clean vehicle batteries of
the same group of vehicles for the purposes of aver-
aging qualifying critical mineral content under para-
graph (a)(3)(iv) of this section.
(A) Applicable critical mineral 1 (ACM-1) has a
value of $100. ACM-1 has one procurement chain;
in this procurement chain, extraction accounts for
20% ($20) of the total value added of ACM-1 and
processing accounts for 80% ($80) of the total value
added of ACM-1. Of the value added by extraction,
100% ($20) is in the United States or in a country
with which the United States has a free trade agree-
ment in effect. Of the value added by processing,
100% ($80) is in the United States or in a country
with which the United States has a free trade agree-
ment in effect.
(B) Applicable critical mineral 2 (ACM-2) has a
value of $200. ACM-2 has two procurement chains.
The value of ACM-2 is $100 per procurement chain.
In the first procurement chain for ACM-2, extraction
accounts for 50% ($50) of the value added, while
processing accounts for 50% ($50). Of the value
added by extraction, 50% ($25) is in United States
or in a country with which the United States has a
free trade agreement in effect. Of the value added
by processing, 25% ($12.50) is in the United States
or in a country with which the United States has a
free trade agreement in effect. In the second procure-
ment chain for ACM-2, extraction accounts for 50%
($50) of the value added, and processing accounts
for 50% ($50) of the value added. Of the value added
by extraction, 75% ($37.50) is in the United States
or in a country with which the United States has a
free trade agreement in effect. Of the value added by
processing, 100% ($50) is in the United States or in a
country with which the United States has a free trade
agreement in effect.
(C) Applicable critical mineral 3 (ACM-3) has a
value of $100. ACM-3 has one procurement chain.
Extraction accounts for 10% ($10) of the value
added and processing accounts for 90% ($90) of the
value added. Of the value added by extraction, 50%
($5) is in the United States or in a country with which
the United States has a free trade agreement in effect.
Of the value added by processing, 75% ($67.50) is
in the United States or in a country with which the
United States has a free trade agreement in effect.
(ii) Analysis—(A) First, Company A determines
each procurement chain. ACM-1 has one procure-
ment chain. ACM-2 has two procurement chains.
ACM-3 has one procurement chain.
(B) Second, Company A determines, for each
procurement chain, the traced qualifying value, and
then determines the total traced qualifying value.
(1) With respect to ACM-1, Company A divides
the value added by extraction that is in the United
States or in any country with which the United
States has a free trade agreement in effect by the
total value added from extraction of the applica-
ble critical mineral: $20/$20, which equals 100%.
Company A divides the value added by processing
that is in the United States or in any country with
which the United States has a free trade agreement
in effect by the total value added from processing
of the applicable critical mineral: $80/$80, which
equals 100%. Because the percentages for extraction
and processing are equal, that percentage (100%) is
used to determine traced qualifying value. Therefore,
Company A multiplies 100% by the total value of the

May 28, 2024 1306 Bulletin No. 2024–22
applicable critical mineral ($100) to obtain $100 as
the traced qualifying value for the procurement chain
of ACM-1.
(2) With respect to the first procurement chain
of ACM-2, Company A divides the value added
by extraction that is in the United States or a
country with which the United States has a free
trade agreement in effect by the total value added
from extraction of the applicable critical mineral:
$25/$50, which equals 50%. Company A divides
the value added by processing that is in the United
States or a country with which the United States has
a free trade agreement in effect by the total value
added from processing of the applicable critical
mineral: $12.50/$50, which equals 25%. Of these
percentages, the one for extraction is greater (50%).
Therefore, Company A multiplies 50% by the total
value of the applicable critical minerals ($100) to
obtain $50 as the traced qualifying value for the
first procurement chain of ACM-2.
(3) With respect to the second procurement chain
of ACM-2, Company A divides the value added by
extraction that is in the United States or a country
with which the United States has a free trade agree-
ment in effect by the total value added from extraction
of the applicable critical mineral: $37.50/$50, which
equals 75%. Company A divides the value added by
processing that is in the United States or a country
with which the United States has a free trade agree-
ment in effect by the total value added from process-
ing of the applicable critical mineral: $50/$50, which
equals 100%. Of these percentages, the one for pro-
cessing is greater (100%). Therefore, Company A
multiplies 100% by the total value of the applicable
critical mineral ($100) to obtain $100 as the traced
qualifying value for the second procurement chain
of ACM-2.
(4) With respect to ACM-3, Company A divides
the value added by extraction that is in the United
States or a country with which the United States
has a free trade agreement in effect by the total
value added from extraction of the applicable crit-
ical mineral: $5/$10, which equals 50%. Company
A divides the value added by processing that is in
the United States or a country with which the United
States has a free trade agreement in effect by the
total value added from processing of the applicable
critical mineral: $67.50/$90, which equals 75%. Of
these percentages, the one for processing is greater
(75%). Company A therefore multiplies 75% by the
total value of the applicable critical mineral ($100)
to obtain $75 as the traced qualifying value for the
procurement chain of ACM-3.
(5) The total traced qualifying value is the sum of
the traced qualifying values of all applicable critical
minerals contained in the clean vehicle battery of the
vehicle, or $325 ($100 + $50 + $100 + $75).
(C) Third, Company A determines the qualifying
critical mineral content by taking the total traced
qualifying value ($325, determined in step 2) divided
by the total value of the critical minerals in the bat-
tery ($400). The qualifying critical mineral content is
therefore 81.25%. Company A uses this percentage
to calculate the average qualifying critical mineral
content for the clean vehicle batteries of a group of
vehicles and compares that average percentage to
the applicable critical minerals percentage of section
30D(e)(2) and §1.30D-3(a)(2).
(2) Example 2: Critical minerals requirement
temporary safe harbor—(i) Facts. The facts are the
same as in paragraph (f)(1)(i) of this section (facts
of Example 1). However, Company A is eligible to
apply the temporary safe harbor of §1.30D-3(a)(4) to
determine its qualifying critical mineral content and
chooses to do so. The applicable critical minerals are
used for the clean vehicle batteries of the same group
of vehicles for the purposes of averaging qualifying
critical mineral content under paragraph (a)(4)(iv) of
this section.
(ii) Analysis—(A) First, Company A determines
each procurement chain, as in paragraph (f)(1) of this
section (Example 1).
(B) Second, Company A determines whether
ACM-1, ACM-2, and ACM-3 are qualifying criti-
cal minerals. ACM-1 is a qualifying critical mineral
because, for both extraction and processing, 100%
of the value added is derived from extraction and
processing that occurs in the United States or in a
country with which the United States has a free trade
agreement in effect. With respect to its first procure-
ment chain, ACM-2 is a qualifying critical mineral
because 50% of the value added from extraction is
derived from extraction that occurs in the United
States or a country with which the United States has
a free trade agreement in effect. With respect to its
second procurement chain, ACM-2 is a qualifying
critical mineral because 75% of the value added
from extraction, and 100% of the value added from
processing are derived from extraction and process-
ing, respectively, that occur in the United States
or in a country with which the United States has a
free trade agreement in effect. ACM-3 is a qualify-
ing critical mineral because 50% of the value added
for extraction, and 75% of the value added for pro-
cessing, are derived from extraction and processing,
respectively, that occur in the United States or in a
country with which the United States has a free trade
agreement in effect. The total value of the qualifying
critical minerals is the sum of the value of all of the
qualifying critical minerals contained in the clean
vehicle battery of the vehicle, or $400 ($100 + $100
+ $100 + $100).
(C) Third, Company A determines qualifying
critical mineral content by taking the total value of
qualifying critical minerals ($400, determined in step
2) and dividing by the total value of critical minerals
in the battery ($400). The qualifying critical mineral
content of the battery is 100%. Company A uses this
percentage to calculate average qualifying critical
mineral content for the clean vehicle batteries of a
group of vehicles and compares that average per-
centage to the applicable critical minerals percentage
of section 30D(e)(2) and §1.30D-3(a)(2).
(3) Example 3: Battery components require-
ment—(i) Facts. Company B uses a battery cell
comprised of a cathode electrode, anode electrode,
separator, and electrolyte. The cathode electrode
has a value of $4,000 and is manufactured in North
America. The anode electrode has a value of $1,000
and is manufactured outside of North America. The
separator has a value of $1,000 and is manufactured
in North America. The electrolyte has a value of
$800 and is manufactured in North America. The
battery cell has a value of $7,500 and is manufac-
tured in North America. The battery components are
used for the clean vehicle batteries of the same group
of vehicles for the purposes of averaging qualifying
critical mineral content under paragraph (b)(3)(iii) of
this section.
(ii) Analysis—(A) First, Company B determines
whether each battery component in a battery is a
North American battery component. The cathode
electrode, separator, and battery cell are North Amer-
ican battery components.
(B) Second, Company B determines the total
incremental value of North American battery com-
ponents. The incremental value of the battery cell
($700) is determined by subtracting from the value of
the battery cell ($7,500) the total value of its battery
components ($6,800). The incremental value of the
cathode electrode is $4,000. The incremental value
of the separator is $1,000. The incremental value of
the electrolyte is $800. The total incremental value of
North American battery components is $6,500 ($700
+ $4,000 + $1,000 + $800).
(C) Third, Company B determines the total
incremental value of battery components. The anode
electrode is not a North American battery component
because it is manufactured outside of North Amer-
ica. The incremental value of the anode electrode is
$1,000. The total incremental value of battery com-
ponents is $6,500 plus $1,000 or $7,500.
(D) Fourth, Company B determines the quali-
fying battery component content by taking the total
incremental value of North American battery com-
ponents ($6,500, determined in Step 2) divided by
the total incremental value of battery components
($7,500, determined in Step 3). The qualifying bat-
tery component content is therefore 86.7%. Com-
pany B uses this percentage to calculate the average
battery component content for the clean vehicle bat-
teries of a group of vehicles and compares that aver-
age percentage to the applicable battery components
percentage of section 30D(e)(2) and §1.30D-3(b)(2).
(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—(1) In general.
Except as provided in paragraph (h)(2) of
this section, this section applies to new
clean vehicles placed in service after April
17, 2023, in taxable years ending after
April 17, 2023.
(2) Upfront review and traced qualify-
ing value. Paragraphs (a)(3) and (4) (relat-
ing to traced qualifying value test) and
(d) (relating to upfront review of critical
minerals and battery components require-
ments) of this section apply to taxable
years ending after May 6, 2024.
§1.30D-4 Special rules.
(a) No double benefit—(1) In general.
Under section 30D(f)(2) of the Internal
Revenue Code (Code), the amount of any

Bulletin No. 2024–22 1307 May 28, 2024
deduction or other credit allowable under
chapter 1 of the Code for a vehicle for
which a credit is allowable under section
30D(a) must be reduced by the amount of
the section 30D credit allowed for such
vehicle (determined without regard to sec-
tion 30D(c)).
(2) Interaction between section 30D
and section 25E credits. A section 30D
credit that has been allowed with respect
to a vehicle in a taxable year before the
year in which a credit under section 25E
of the Code is allowable for that vehicle
does not reduce the amount allowable
under section 25E.
(3) Interaction between section 30D
and section 45W credits. Pursuant to sec-
tion 45W(d)(3) of the Code, no credit is
allowed under section 45W with respect to
any vehicle for which a credit was allowed
under section 30D.
(b) Limitation based on modified
adjusted gross income—(1) In general.
Under section 30D(f)(10)(A), no credit is
allowed under section 30D(a) for any tax-
able 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
section 30D(f)(10)(A) and paragraph (b)
(1) of this section, the threshold amount
applies to taxpayers based on the return
filing status for the taxable year, as set
forth in paragraphs (b)(2)(i) through (iii)
of this section. See section 30D(f)(10)(B).
(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
$300,000,
(ii) In the case of a head of household
(as defined in section 2(b)), the threshold
amount is $225,000.
(iii) In the case of a taxpayer not
described in paragraph (b)(2)(i) or (ii)
of this section, the threshold amount is
$150,000.
(3) Special rule for change in filing sta-
tus. If the taxpayer’s filing status for the
taxable year differs from the taxpayer’s
filing status in the preceding taxable year,
then the taxpayer satisfies the limitation
described in section 30D(f)(10) and para-
graph (b)(1) of this section if the taxpay-
er’s modified adjusted gross income does
not exceed the threshold amount in either
year based on the applicable filing status
for that taxable year.
(4) Application to estates and trusts—
(i) Estates and non-grantor trusts. In the
case of a new clean vehicle placed in ser-
vice by an estate or a non-grantor trust, the
threshold amount of paragraph (b)(2)(iii)
of this section applies for purposes of the
modified adjusted gross income limitation
of section 30D(f)(10) and this paragraph
(b). For purposes of the modified adjusted
gross income limitation, an estate or non-
grantor trust is treated as having modified
adjusted gross income above the threshold
amount for any year in which the estate or
non-grantor trust is not in existence.
(ii) Grantor trusts. In the case of a
new clean vehicle placed in service by a
grantor trust, the modified adjusted gross
income limitation of section 30D(f)(10)
and this paragraph (b) applies based on
the modified adjusted gross income of
the grantor or other deemed owner of the
trust, and not the modified adjusted gross
income of the trust or any beneficiary of
the trust other than the grantor or other
deemed owner.
(5) Application to passthrough entities.
In the case of a new clean vehicle placed
in service by a partnership or an S corpo-
ration, if the section 30D credit is claimed
by individuals, non-grantor trusts, or
estates who are direct or indirect partners
of that partnership or shareholders of that
S corporation, the modified gross income
limitation of section 30D(f)(10) and this
paragraph (b) applies at the partner or
shareholder level in accordance with the
rules of this paragraph (b).
(6) Other taxpayers. The modified
adjusted gross income limitation of this
paragraph (b) does not apply in the case
of a new clean vehicle placed in service
by a corporation or by a taxpayer that is
not an individual, estate, trust, or entity as
provided in paragraph (b)(4) or (b)(5) of
this section.
(c) Credit may generally be claimed
on only one tax return—(1) In general.
Except as provided in paragraph (c)(2)
of this section, the amount of the section
30D credit attributable to a new clean
vehicle may be claimed on only one Fed-
eral income tax return, including on a
joint return in which one of the spouses
is listed on the seller report. In the event a
new clean vehicle is placed in service by
multiple taxpayers who do not file a joint
tax return (for example, in the case of mar-
ried individuals filing separate returns), no
allocation or proration of the section 30D
credit is available.
(2) Exception for passthrough entities.
In the case of a new clean vehicle placed
in service by a partnership or an S corpo-
ration, the section 30D credit is allocated
among the partners of the partnership
under §1.704-1(b)(4)(ii), or among the
shareholder(s) of the S corporation under
sections 1366(a) and 1377(a) of the Code,
and claimed on the Federal income tax
returns of the individual partners or S cor-
poration shareholder(s).
(3) Seller reporting—(i) In general.
The name and taxpayer identification
number of the taxpayer claiming the sec-
tion 30D credit must be listed on the seller
report pursuant to section 30D(d)(1)(H).
The credit will be allowed only on the
Federal income tax return of the taxpayer
listed in the seller report.
(ii) Passthrough entities. In the case of
a new clean vehicle placed in service by
a partnership or S corporation, the name
and tax identification number of the part-
nership or S corporation that placed the
new clean vehicle in service must be listed
on the seller report pursuant to section
30D(d)(1)(H).
(4) Example. A married couple jointly purchases
and places in service a new clean vehicle that quali-
fies for the section 30D credit and puts both of their
names on the title. The couple files separate Fed-
eral income tax returns by using the married filing
separately filing status. Only one spouse may claim
the section 30D credit with respect to the new clean
vehicle on that spouse’s respective return, and the
other spouse may not claim any amount of the sec-
tion 30D credit with respect to that new clean vehi-
cle. The spouse that claims the section 30D credit
must be the same spouse listed on the seller report.
(d) Grantor trusts. To the extent that
the grantor or another person is treated as
owning all or part of a trust under sections
671 through 679 of the Code, the section
30D credit is allocated to such grantor or
other person in accordance with §1.671-
3(a)(1).
(e) Recapture rules—(1) In general.
This paragraph (e) provides rules under
section 30D(f)(5) regarding the recapture
of the section 30D credit.

May 28, 2024 1308 Bulletin No. 2024–22
(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 upon a subsequent sale that meets
the requirements of section 30D and the
section 30D regulations;
(C) The seller report must be rescinded
by the seller in the manner set forth in
guidance published in the Internal Reve-
nue Bulletin (see §601.601 of this chap-
ter); and
(D) The taxpayer cannot make a credit
transfer election under section 30D(g) and
§1.30D-5(d) with respect to the cancelled
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 in the manner set forth in
guidance published in the Internal Reve-
nue Bulletin (see §601.601 of this chap-
ter); and
(D) A credit transfer election under
30D(g) and §1.30D-5(d), if applicable,
will be treated as nullified and any advance
payment made pursuant to section 30D(g)
and §1.30D-5(f), if applicable, will be col-
lected from the eligible entity as an exces-
sive payment pursuant to §1.30D-5(g)(2).
(iii) Resale. If a taxpayer resells a vehi-
cle within 30 days of placing the vehicle
in service, then the taxpayer is treated as
having purchased such 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 credit transfer election under
30D(g) and §1.30D-5(d), if applicable,
will remain in effect and any advance pay-
ment made pursuant to section 30D(g) and
§1.30D-5(f) will not be collected from the
eligible entity; and
(E) The value of any transferred credit
will be collected from the taxpayer as an
increase in tax imposed by chapter 1 of
the Code for the taxable year in which the
vehicle is placed in service.
(iv) Other vehicle returns and resales.
In the case of a return of a new clean vehi-
cle not described in paragraph (e)(1)(ii)
of this section or a resale not described
in paragraph (e)(1)(iii) of this section, the
vehicle will no longer be considered avail-
able for original use by another taxpayer,
and, therefore, will no longer be eligible
for the section 30D credit upon a subse-
quent sale.
(2) Recapture rules in the case of a
credit transfer election. For additional
recapture rules that apply in the case of
a credit transfer election, see §1.30D-
5(g)(1). For excessive payment rules that
apply in the case of an advance payment
made to an eligible entity, see §1.30D-5(g)
(2).
(3) Example: Demonstrator vehicle. A dealer
purchases, registers, and titles a vehicle in its name
and uses it as a demonstrator vehicle for customers.
The dealer resells the vehicle more than 30 days after
placing the vehicle in service. The dealer claimed the
section 30D credit on its Federal tax return for the
tax year the vehicle is placed in service. The credit
recapture provision in §1.30D-4(e)(1)(iii) does not
apply because the vehicle was resold more than 30
days after being placed in service.
(f) Seller registration. A seller must
register with the IRS in the manner set
forth in guidance published in the Inter-
nal Revenue Bulletin (see §601.601 of
this chapter) for purposes of filing seller
reports (as defined in §1.30D-2(b)(46)).
(g) Requirement to file return. No sec-
tion 30D credit is allowed unless the tax-
payer claiming such credit files a Federal
income tax return or information return,
as appropriate, for the taxable year in
which the new clean vehicle is placed in
service. The taxpayer must attach to such
return a completed Form 8936, Clean
Vehicle Credits, or successor form that
includes all information required by the
form and instructions. The taxpayer must
also attach a completed Schedule A (Form
8936), Clean Vehicle Credit Amount, or
successor form or schedule that includes
all information required by the schedule
and instructions, such as the vehicle iden-
tification number of the previously-owned
clean vehicle.
(h) Taxpayer reliance on manufacturer
certifications and periodic written reports
to the IRS. A taxpayer that acquires a new
clean vehicle and places it in service may
rely on the manufacturer’s certification
concerning the manufacturer’s status as
a qualified manufacturer. A taxpayer also
may rely on the information and certifi-
cations contained in the qualified man-
ufacturer’s written reports to the IRS.
The procedures for such periodic written
reports are established in guidance pub-
lished in the Internal Revenue Bulletin
(see §601.601 of this chapter). To the
extent a taxpayer relies on certifications
or attestations from the qualified man-
ufacturer regarding certain section 30D
requirements, the new clean vehicle the
taxpayer acquires will be deemed to meet
the requirements of section 30D(d)(1)(C)
through (F), (d)(7), and (e). See §1.30D-
5(g)(3)(ii) for an example that illustrates
the interplay between the rule in this para-
graph (h) and the excessive payment rule
in §1.30D-3(g)(2).
(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 agencies’ intention that the remain-
ing provisions shall continue in effect.
(j) Applicability date. This section
applies to taxable years ending after
December 4, 2023.
§1.30D-5 Transfer of credit.
(a) In general. This section provides
rules related to the transfer and advance
payment of the section 30D credit pur-
suant to section 30D(g) of the Internal
Revenue Code (Code). Under the rules of
section 30D(g) and this section, a taxpayer
may elect to transfer a section 30D credit
to an eligible entity, and the eligible entity
may receive an advance payment for such
credit, provided certain requirements are
met. See paragraph (d) of this section for
rules applicable to credit transfer elec-

Bulletin No. 2024–22 1309 May 28, 2024
tions. See paragraph (f) of this section for
rules applicable to advance payments of
transferred section 30D credits. Section
30D(g)(2) sets forth certain requirements
that a dealer must satisfy to be an eligi-
ble entity for credit transfer and advance
payment purposes. Section 30D(g)(2)
(A) requires registration with the IRS.
See paragraph (c) of this section for rules
related to dealer registration. Section
30D(g)(2)(B) through (D) and paragraph
(f)(2) of this section impose additional
requirements that a registered dealer must
satisfy in order to be an eligible entity for
credit transfer and advance payment pur-
poses.
(b) Definitions. This paragraph (b) pro-
vides definitions that apply for purposes
of section 30D(g) and this section. See
§1.30D-2(b) for definitions that are gen-
erally applicable to section 30D and the
section 30D regulations.
(1) Advance payment program.
Advance payment program means the
program described in paragraph (f)(1) of
this section.
(2) Credit transfer election. Credit
transfer election has the meaning provided
in section 30D(g) and paragraph (d) of this
section.
(3) 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 by 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 it is licensed.
(4) Dealer tax compliance. Dealer tax
compliance means the dealer has filed
all required Federal information and tax
returns, including for Federal income
and employment tax purposes, and the
dealer has paid all Federal tax, penalties,
and interest due as of the time of sale. A
dealer that has entered into an installment
agreement with the IRS for which a dealer
is current on its obligations (including fil-
ing obligations) is treated as in dealer tax
compliance.
(5) Electing taxpayer. Electing tax-
payer means an individual who purchases
and places in service a new clean vehi-
cle and elects to transfer the section 30D
credit that would otherwise be allowable
to such individual to an eligible entity pur-
suant to section 30D(g) and paragraph (d)
of this section. A taxpayer is an electing
taxpayer only if the taxpayer makes cer-
tain attestations to the registered dealer,
pursuant to procedures provided in guid-
ance published in the Internal Revenue
Bulletin (see §601.601 of this chapter),
including that the taxpayer does not antic-
ipate exceeding the modified adjusted
gross income limitation of section 30D(b)
(1) and §1.30D-4(b) and that the taxpayer
will use the vehicle predominantly for
personal use.
(6) Eligible entity. Eligible entity has
the meaning provided in section 30D(g)
(2) and paragraph (f)(2) of this section.
(7) Incentive. For purposes of the eligi-
ble entity requirements of section 30D(g)
(2)(B)(ii) and (D), incentive means any
reduction in price available to the taxpayer
from the dealer or manufacturer, includ-
ing in combination with other incentives,
other than a reduction in the form of a
partial payment or down payment for the
purchase of a new clean vehicle pursuant
to section 30D(g)(2)(C).
(8) Registered dealer. Registered
dealer means a dealer that has completed
registration with the IRS as provided in
paragraph (c) of this section.
(9) Sale price. The sale price of a new
clean vehicle means the total price agreed
upon by the taxpayer and dealer in a writ-
ten contract at the time of sale, including
any delivery charges and after the appli-
cation of any incentives. The sale price
of a new clean vehicle does not include
separately stated taxes and fees required
by State or local law. The sale price of a
new clean vehicle is determined before
the application of any trade-in value.
(10) Time of sale. Time of sale means
the date the new clean vehicle is placed
in service, as defined in §1.30D-2(b)(36).
(c) Dealer registration—(1) In gen-
eral. A dealer must register with the IRS
in the manner set forth in guidance pub-
lished in the Internal Revenue Bulletin
(see §601.601 of this chapter) for the
dealer to receive credits transferred by
an electing taxpayer pursuant to section
30D(g) and paragraph (d) of this section.
(2) Dealer tax compliance required. A
dealer must be in dealer tax compliance to
complete and maintain its registration with
the IRS and paragraph (d) of this section.
If the dealer is not in dealer tax compli-
ance for any of the taxable periods during
the last five taxable years, then the dealer
may complete its initial registration with
the IRS, but the dealer will not be eligible
for the advance payment program (and,
therefore, the dealer will not be eligible
to receive transferred section 30D credits)
until the compliance issue is resolved. The
IRS will notify the dealer in writing that
the dealer is not in dealer tax compliance,
and the dealer will have the opportunity to
address any failure through regular proce-
dures. If the failure is corrected, the IRS
will complete the dealer’s registration,
and, provided all other requirements of
section 30D(g) and this section are met,
the dealer will then be allowed to receive
transferred section 30D credits and par-
ticipate in the advance payment program.
Additional procedural guidance regard-
ing this paragraph is set forth in guidance
published in the Internal Revenue Bulletin
(see §601.601 of this chapter).
(3) Suspension of registration. A
registered dealer’s registration may be
suspended 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 regis-
tered dealer’s registration is not subject to
administrative appeal to the IRS Indepen-
dent 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 registration. A regis-
tered dealer’s registration may be revoked
pursuant to the procedures described in
guidance published in the Internal Reve-
nue Bulletin (see §601.601). Any decision
made by the IRS relating to the revocation
of a dealer’s registration is not subject to
administrative appeal to the IRS Indepen-
dent 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.
(d) Credit transfer election by electing
taxpayer. 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 credit transfer election with

May 28, 2024 1310 Bulletin No. 2024–22
respect to the vehicle so that the section
30D credit with respect to the vehicle is
allowed to the eligible entity specified in
the credit transfer election (and not to the
electing taxpayer) pursuant to the advance
payment program described in paragraph
(f) of this section. The electing taxpayer,
as part of the credit 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 eligible
entity specified in the credit transfer elec-
tion must pay the electing taxpayer an
amount equal to the amount of the credit
included in the credit transfer election. A
credit transfer election must be made no
later than the time of sale, and must be
made in the manner set forth in guidance
published in the Internal Revenue Bulle-
tin (see §601.601 of this chapter). Once
made, a credit transfer election is irrevo-
cable. No credit transfer election may be
made to transfer an amount of credit that
would otherwise be allowed to the elect-
ing taxpayer under section 38.
(e) Federal income tax consequences
of the credit transfer election—(1) Tax
consequences for electing taxpayer. In
the case of a credit 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 (d) 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 on the basis
that it exceeded the electing taxpayer’s
regular tax liability;
(ii) The payment made by an eligible
entity to an electing taxpayer under sec-
tion 30D(g)(2)(C) and paragraph (d) of
this section to an electing taxpayer pur-
suant to the credit transfer election is not
includible in the gross income of the elect-
ing taxpayer; and
(iii) The payment made by an eligi-
ble entity to an electing taxpayer under
section 30D(g)(2)(C) and paragraph (d)
of this section is treated as repaid by the
electing taxpayer to the eligible entity as
partial payment of the sale price of the
new clean vehicle. Thus, the repayment
by the electing taxpayer is included in the
electing taxpayer’s basis in the new clean
vehicle prior to the application of the basis
reduction rule in section 30D(f)(1).
(2) Tax consequences for eligible entity.
In the case of a credit transfer election, the
Federal income tax consequences for the
eligible entity are as follows—
(i) The eligible entity is allowed the
section 30D credit with respect to the new
clean vehicle and may receive an advance
payment pursuant to section 30D(g)(7)
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 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 (d) 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 (d) of
this section is treated as repaid by the
electing taxpayer to the eligible entity as
partial payment of the sale price of the new
clean vehicle. Thus, the repayment by the
electing taxpayer is treated as an amount
realized by the eligible entity under sec-
tion 1001 of the Code and the regulations
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 (e)(1) and (2) of this sec-
tion is the same regardless of whether the
payment is made in cash, in the form of a
partial payment or down payment for the
purchase of the new clean vehicle, or as a
reduction in sale price (without the pay-
ment of cash) of the new clean vehicle.
(4) Additional requirements. In the case
of a credit 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 credit trans-
fer election were not made (so, for exam-
ple, the electing taxpayer must reduce the
electing taxpayer’s basis in the vehicle
by the amount of the section 30D credit,
regardless of the credit 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);
(iii) Section 30D(f)(9) (regarding the
vehicle identification number require-
ment) will be treated as satisfied if the eli-
gible entity provides the vehicle identifica-
tion number of such vehicle to the IRS in
the form and manner set forth in guidance
published in the Internal Revenue Bulletin
(see §601.601 of this chapter). The elect-
ing taxpayer must also provide the vehicle
identification number with their tax return
for the taxable year in which the vehicle is
placed in service. See section 6213(g)(2)
(T) of the Code and §301.6213-2 of this
chapter for rules relating to the omission
of a correct vehicle identification number.
(5) Examples. The following examples
illustrate the rules of paragraph (e) of this
section.
(i) Example 1: Electing taxpayer’s regular tax
liability less than amount of credit—(A) Facts. T,
an individual, purchases a new clean sport utility
vehicle from a dealer, D, which is a C corporation. T
satisfies the requirements to be an electing taxpayer
and elects to transfer the section 30D credit to D. D
is a registered dealer and satisfies the requirements to
be an eligible entity. The sale price of the vehicle is
$57,500. The section 30D credit otherwise allowable
to T is $7,500. D makes the payment required to be
made to T in the form of a cash payment of $7,500. T
uses the $7,500 as a partial payment for the vehicle.
T pays D an additional $50,000 from other funds. T’s
regular tax liability for the year is less than $7,500.
(B) Analysis. Under paragraph (e)(1)(i) of this
section, T may transfer the credit to D, even though

Bulletin No. 2024–22 1311 May 28, 2024
T’s regular tax liability is less than $7,500, and
no amount of the credit will be recaptured from
T on the basis that the allowable credit exceeds
T’s regular tax liability. D’s $7,500 payment to T
is not included in T’s gross income, and the sale
price of the vehicle is $57,500 (including both the
$7,500 payment and the additional $50,000 paid
by T from other funds), prior to the application of
the basis reduction rule of section 30D(f)(1). After
application of the basis reduction rule, T’s basis
in the vehicle is $50,000. D 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 (f) of this section. Under paragraph
(e)(2) of this section, D may receive the advance
payment irrespective of the fact that D’s regular tax
liability is less than $7,500. The advance payment
is not treated as a credit toward D’s tax liability (if
any), nor is it included in D’s gross income. Fur-
ther, D’s $7,500 payment to T is not deductible, and
D’s amount realized is $57,500 upon the sale of the
vehicle (including both the $7,500 payment from D
to T that T uses as a partial payment, and the addi-
tional $50,000 paid by T from other funds).
(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 D makes the pay-
ment to T in the form of a reduction in the sale price
of the vehicle (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 pay-
ment from an eligible entity to an electing taxpayer
(for example, a payment in cash or a payment in the
form of a reduction in sale price). Thus, the analysis
is the same as in paragraph (e)(5)(i)(B) of this sec-
tion (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 D is a partnership.
(B) Analysis. The analysis as to T is the same as
in paragraph (e)(5)(i)(B) of this section (analysis of
Example 1). Because D 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 allocated 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 eligible
entity may receive advance payments from
the IRS (corresponding to the amount of
the section 30D credit for which a credit
transfer election was made by an elect-
ing taxpayer to transfer the credit to the
eligible entity pursuant to section 30D(g)
and paragraph (d) of this section) before
the eligible entity files its Federal income
tax return or information return, as appro-
priate, for the taxable year with respect
to which the credit transfer election cor-
responds. This advance payment program
is the exclusive mechanism for an eligible
entity to receive the section 30D credit
transferred pursuant to section 30D(g) and
paragraph (d) of this section. An eligible
entity receiving a transferred section 30D
credit may not claim the credit on a 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, in connection with a
credit transfer election, if it meets the fol-
lowing requirements:
(i) The registered dealer submits
required registration information and is in
dealer tax compliance;
(ii) The registered dealer retains infor-
mation regarding the credit 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 registered dealer meets any
other requirements set forth in guidance
published in the Internal Revenue Bulletin
(see §601.601 of this chapter) or in forms
and instructions; and
(iv) The registered dealer meets any
other requirements of section 30D(g),
including those in section 30D(g)(2)(B)
through (E).
(g) Increase in tax—(1) Recapture
if electing taxpayer exceeds modified
adjusted gross income limitation. If an
electing taxpayer has modified adjusted
gross income that exceeds the limitation
in section 30D(f)(10) and §1.30D-4(b),
then the income tax imposed on such tax-
payer under chapter 1 of the Code (chap-
ter 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 electing taxpayer must
recapture such amounts on the return
described in paragraph (h) of this section.
(2) Excessive payments—(i) In gen-
eral. This paragraph provides rules under
section 30D(g)(7)(B), which provides
that rules similar to the rules of sec-
tion 6417(d)(6) of the Code apply to the
advance payment program. In the case of
any advance payment to an eligible entity
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 tax-
able year in which such determination 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 (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 new clean vehicle (with
respect to which a credit transfer election
was made by the electing taxpayer) that
is returned to the eligible entity within
30 days of being placed in service, the
eligible entity will be treated as having
demonstrated that the excessive payment
resulted from reasonable cause.
(iii) Excessive payment defined. Exces-
sive 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 (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 new clean 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 tax-
payer with respect to the vehicle for such
tax year.
(iv) Special rule for cases in which
the electing taxpayer’s modified adjusted
gross income exceeds the limitation. Any
excess described in paragraph (g)(2)(iii)
(B) of this section that arises due to the
electing taxpayer exceeding the limitation
based on modified adjusted gross income
in section 30D(f)(10) and §1.30D-4(b) is
not an excessive payment. Instead, the
amount of the advance payment is recap-
tured from the electing taxpayer under
section 30D(g)(10) and paragraph (g)(1)
of this section.
(3) Examples. The following examples
illustrate the excessive payment rules in
paragraph (g)(2) of this section.

May 28, 2024 1312 Bulletin No. 2024–22
(i) Example 1: Registered dealer is not an eligi-
ble entity—(A) 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 (d) of this section for a new clean vehicle
V. In 2025, the IRS determines that D was not an
eligible entity with respect to new clean vehicle V
at the time of the receipt of the advance payment in
2024, because D failed to satisfy one of the require-
ments of section 30D(g)(2) and paragraph (f)(2) of
this section. D is unable to show reasonable cause
for the failure.
(B) 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 $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 paragraph (f)
(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 a 20% penalty on such $7,500 (20% x
$7,500 = $1,500). This treatment applies regardless
of whether D is otherwise subject to tax under chap-
ter 1 (for example, if D is a partnership).
(ii) Example 2: Incorrect manufacturer certifica-
tions—(A) Facts. In 2024, T, a taxpayer, makes an
election to transfer a credit under section 30D(g)(1)
and paragraph (d) of this section to E, a registered
dealer, for a new clean vehicle V. M, the manufac-
turer of such vehicle, certified to the IRS that vehi-
cle V was eligible for a $7,500 credit because it met
both the critical minerals and the battery components
requirements. T transfers the $7,500 credit to E. Sub-
sequent to T’s purchase and election to transfer the
$7,500 credit to E, M reports to the IRS that vehicle
V was only eligible for a $3,750 credit because it did
not meet the critical minerals requirement.
(B) Analysis. Under §1.30D-4(h), T may rely on
the information and certifications provided in M’s
written report to the IRS regarding vehicle V’s eligi-
bility for the section 30D credit. Under paragraph (g)
(2)(iii)(B) of this section, an advance payment to an
eligible entity with respect to a vehicle is an exces-
sive payment to the extent the payment exceeds the
amount of the credit that, without a credit transfer
election, would be otherwise allowable to the elect-
ing taxpayer with respect to the vehicle for such
taxable year. Because the amount of the credit that
would be allowable to T for 2024 is $7,500, and T
transferred the $7,500 credit to E, there is no exces-
sive payment with respect to E.
(h) Return requirement. An electing
taxpayer that makes a credit transfer elec-
tion must file a Federal income tax return
or information return, as appropriate, for
the taxable year in which the credit trans-
fer election is made and indicate such
election on the return in accordance with
the instructions to the form on which the
return is made. The electing taxpayer must
attach a completed Form 8936, Clean
Vehicle Credits, or successor form, and
a completed Schedule A (Form 8936),
Clean Vehicle Credit Amount, or succes-
sor form or schedule, including the vehi-
cle identification number of the new clean
vehicle and such other information as pro-
vided in forms and instructions.
(i) Two credit transfer elections per
year. A taxpayer may make no more than
two credit transfer elections per taxable
year, consisting of either two elections to
transfer section 30D credits, or one elec-
tion to transfer a section 30D credit and
one election to transfer a section 25E
credit. In the case of taxpayers who file a
joint return, each individual taxpayer may
make no more than two credit 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 agencies’ intention that the remain-
ing provisions will continue in effect.
(k) Applicability date. This section
applies to new clean vehicles placed in ser-
vice after December 31, 2023, in taxable
years ending after December 31, 2023.
§1.30D-6 Foreign entity of concern
restriction.
(a) In general. This section provides
rules related to the excluded entities pro-
vision of section 30D(d)(7) of the Inter-
nal Revenue Code (Code), which imposes
certain restrictions on the extraction, pro-
cessing, or recycling of applicable critical
minerals, and the manufacturing or assem-
bly of battery components contained in a
clean vehicle battery by a foreign entity
of concern (FEOC). Specifically, section
30D(d)(7) provides that the term new
clean vehicle does not include any vehi-
cle placed in service after December 31,
2023, with respect to which any of the bat-
tery components in the clean vehicle bat-
tery were manufactured or assembled by
a FEOC, or any vehicle placed in service
after December 31, 2024, with respect to
which any of the applicable critical miner-
als contained in the clean vehicle battery
were extracted, processed, or recycled by
a FEOC (FEOC restriction). See §1.30D-
2(b) for definitions applicable to section
30D(d)(7) and this section.
(b) Due diligence required—(1) In
general. The qualified manufacturer must
conduct due diligence with respect to all
battery components and applicable criti-
cal minerals (and associated constituent
materials) that are relevant to determin-
ing whether such components or minerals
are FEOC-compliant. Such due diligence
must comply with standards of tracing for
battery materials available in the industry
at the time of the attestation or certifica-
tion that enables the qualified manufac-
turer to know with reasonable certainty
the provenance of applicable critical min-
erals, associated constituent materials, and
battery components. Reasonable reliance
on a supplier attestation or certification
will be considered due diligence if the
qualified manufacturer, or any third-party
manufacturer or supplier, does not know
or have reason to know that such supplier
attestation or certification is incorrect. See
paragraph (c)(5) of this section for rules
related to third-party manufacturers and
suppliers. The qualified manufacturer
must conduct due diligence prior to the
qualified manufacturer determining the
information necessary to establish any
compliant-battery ledger under paragraph
(d) of this section, and the qualified man-
ufacturer must continue to conduct due
diligence on an ongoing basis.
(2) Transition rule for impractica-
ble-to-trace battery materials. For any
new clean vehicles for which the qualified
manufacturer provides a periodic written
report before January 1, 2027, the due dil-
igence requirement of paragraph (b)(1) of
this section may be satisfied by excluding
identified impracticable-to-trace battery
materials. To use this transition rule, a
qualified manufacturer must submit a
report during the up-front review pro-
cess described in paragraph (d)(2)(ii) of
this section demonstrating how the qual-
ified manufacturer will comply with the
FEOC restriction of section 30D(d)(7)
and this section, including information
about efforts made to date to secure a
FEOC-compliant supply of these battery
materials once the transition rule is no lon-
ger in effect.
(c) FEOC compliance—(1) In gen-
eral. In the case of any new clean vehi-
cle placed in service after December 31,
2023, the clean vehicle battery or batteries
of the vehicle must be FEOC-compliant.

Bulletin No. 2024–22 1313 May 28, 2024
A serial number or other identification
system must be used to physically track
FEOC-compliant batteries to specific new
clean vehicles. The determination that a
clean vehicle battery is FEOC-compliant
is made as follows:
(i) Step 1. The qualified manufac-
turer determines whether battery com-
ponents and applicable critical minerals
(and associated constituent materials)
are FEOC-compliant, in accordance with
paragraph (c)(4) of this section.
(ii) Step 2. The FEOC-compliant bat-
tery components and FEOC-compliant
applicable critical minerals (and associ-
ated constituent materials) are physically
tracked to specific battery cells, in accor-
dance with paragraph (c)(3)(i) of this
section. Alternatively, FEOC-compliant
applicable critical minerals and associated
constituent materials (but not battery com-
ponents) may be allocated to battery cells,
without physical tracking, in accordance
with paragraph (c)(3)(ii) of this section.
In addition, the determination of whether
a battery cell is FEOC-compliant may be
made by applying the transition rule for
impracticable-to-trace battery materials,
in accordance with paragraph (c)(3)(iii) of
this section.
(iii) Step 3. The battery components,
including battery cells, are physically
tracked to specific clean vehicle batteries,
in accordance with paragraph (c)(2) of
this section.
(2) FEOC-compliant batteries. The
determination that a clean vehicle bat-
tery is FEOC-compliant must be made by
physically tracking FEOC-compliant bat-
tery components (including battery cells)
to such battery. With respect to battery
cells, a serial number or other identifica-
tion system must be used to physically
track FEOC-compliant battery cells to
such batteries.
(3) FEOC-compliant battery cells—
(i) In general. Except as provided in
paragraph (c)(3)(ii) of this section, the
determination that a battery cell contains
FEOC-compliant battery components
and FEOC-compliant applicable critical
minerals and their associated constituent
materials must be made by physically
tracking FEOC-compliant battery compo-
nents to specific battery cells, and by phys-
ically tracking the mass of FEOC-compli-
ant applicable critical minerals and their
associated constituent materials to specific
battery cells.
(ii) Allocation-based determination
for applicable critical minerals and asso-
ciated constituent materials of a battery
cell—(A) In general. The determination
that a battery cell is FEOC-compliant may
be based on an allocation of available
mass, procured or contracted for, of appli-
cable critical minerals and their associated
constituent materials to specific battery
cells manufactured or assembled in a bat-
tery cell production facility, without the
physical tracking of mass of applicable
critical minerals and associated constitu-
ent materials to specific battery cells.
(B) Allocation limited to applicable
critical minerals in the battery cell. The
rules of this paragraph (c)(3)(ii) are lim-
ited to applicable critical minerals and
their associated constituent materials that
are incorporated into a battery cell or its
battery components. Battery components
must be physically tracked.
(C) Separate allocation required for
each type of associated constituent mate-
rial—(1) In general. Any allocation under
this paragraph (c)(3)(ii) with respect to the
mass of an applicable critical mineral must
be made within the type of associated con-
stituent material (such as powders of cath-
ode active materials, powders of anode
active materials, or foils) in which such
applicable critical mineral is contained.
Masses of an applicable critical mineral
may not be aggregated across constituent
materials with which such applicable crit-
ical mineral is not associated, and an allo-
cation of a mass of an applicable critical
mineral may not be made from one type of
constituent material to another.
(2) Example. M, a qualified manufacturer,
operates a battery cell production facility. M
manufactures a line of battery cells that contains
applicable critical mineral Z (ACM-Z) in con-
stituent material 1 and in constituent material 2.
With respect to constituent material 1, M procures
20,000,000 kilograms (kg) of ACM-Z for the bat-
tery cell production facility, of which 4,000,000
kg are FEOC-compliant and 16,000,000 kg are not
FEOC-compliant. With respect to constituent mate-
rial 2, M procures another 15,000,000 kg of ACM-Z
for the battery cell production facility, of which
7,500,000 kg are FEOC-compliant and 7,500,000
kg are not FEOC-compliant. M determines which
battery cells are FEOC-compliant through an allo-
cation-based determination with respect to battery
cells manufactured or assembled in the battery cell
production facility. Under this paragraph (c)(3)
(ii)(C), any allocation with respect to the mass of
ACM-Z must be made within the type of constitu-
ent material in which ACM-Z is contained. Thus, M
may not aggregate the 4,000,000 kg of FEOC-com-
pliant ACM-Z contained in constituent material 1
with the 7,500,000 kg of FEOC-compliant ACM-Z
contained in constituent material 2, and allocations
may not be made from constituent material 1 to
constituent material 2. As a result, overall FEOC
compliance is constrained by the 20% of constit-
uent material 1 that is FEOC-compliant due to
having 4,000,000 kg of ACM-Z, even though 33%
(4,000,000 + 7,500,000)/(20,000,000 + 15,000,000)
of the total mass of ACM-Z is FEOC-compliant.
(D) Allocation within each product line
of battery cells. Any allocation under this
paragraph (c)(3)(ii) with respect to appli-
cable critical minerals and their associated
constituent materials must be allocated
within one or more specific battery cell
product lines of the battery cell production
facility.
(E) Limitation on number of
FEOC-compliant battery cells. If a quali-
fied manufacturer uses an allocation-based
determination described in this paragraph
(c)(3)(ii), the number of FEOC-com-
pliant battery cells that can be produced
from such allocation may not exceed the
total number of battery cells for which
there is enough of every FEOC-compliant
applicable critical mineral. That number
will necessarily be limited by the appli-
cable critical mineral that has the lowest
percentage of FEOC-compliant supply.
For example, if a qualified manufacturer
allocates applicable critical mineral A,
which is 20 percent FEOC-compliant, and
applicable critical mineral B, which is 60
percent FEOC-compliant, to a battery cell
product line, no more than 20 percent of
the battery cells in that battery cell product
line will be treated as FEOC-compliant.
(iii) Transition rule for impractica-
ble-to-trace battery materials. For any
new clean vehicles for which the qual-
ified manufacturer provides a periodic
written report before January 1, 2027, the
qualified manufacturer’s determination of
whether a battery cell is FEOC-compliant
under this paragraph (c)(3) may be satis-
fied by excluding identified impractica-
ble-to-trace battery materials (and associ-
ated constituent materials).
(4) FEOC-compliant battery compo-
nents and applicable critical minerals—(i)
In general. The determination of whether
battery components and applicable critical
minerals (and their associated constituent
materials) are FEOC-compliant must be

May 28, 2024 1314 Bulletin No. 2024–22
made prior to any determination under
paragraphs (c)(2) and (3) of this section.
(ii) Timing of determination of FEOC
or FEOC-compliant status. Whether an
entity is a FEOC is determined at the time
of the entity’s performance of the relevant
activity, which for applicable critical min-
erals is the time of extraction, processing,
or recycling, and for battery components
is the time of manufacturing or assembly.
The determination of whether an applica-
ble critical mineral is FEOC-compliant
is determined at the end of processing or
recycling the applicable critical mineral
into a constituent material, taking into
account all applicable steps through and
including final processing or recycling.
(iii) Example: Timing of FEOC compliance
determination. Mineral X, an applicable critical min-
eral, was not extracted by a FEOC but was later pro-
cessed by a FEOC. Mineral X is not FEOC-compli-
ant because one step of the extraction and processing
was performed by a FEOC. Therefore, any battery
containing Mineral X is not FEOC-compliant.
(5) Third-party manufacturers or sup-
pliers. The determinations under para-
graphs (c)(2) through (4) of this section,
which are generally made by the qual-
ified manufacturer, may be made by a
third-party manufacturer or supplier that
operates a battery cell production facility,
provided the third-party manufacturer sat-
isfies the requirements of paragraph (c)(5)
(i) through (iii) of this section, and para-
graph (c)(5)(iv) of this section, if applica-
ble.
(i) Due diligence required. The third-
party manufacturer or supplier must per-
form the due diligence described in para-
graph (b) of this section.
(ii) Provision of required information
to qualified manufacturer. The third-party
manufacturer or supplier must provide the
qualified manufacturer of the new clean
vehicle information sufficient to establish
a basis for the determinations under para-
graphs (c)(2) through (4) of this section,
including information related to the due
diligence described in paragraph (c)(5)(i)
of this section.
(iii) Contractual obligations. The
third-party manufacturer or supplier must
be contractually required to provide the
information in paragraph (c)(5)(ii) of this
section to the qualified manufacturer and
must be contractually required to inform
the qualified manufacturer of any change
in the supply chain that affects the deter-
minations of FEOC compliance under
paragraph (c)(2) through (4) of this sec-
tion.
(iv) Additional requirements in case
of multiple third-party manufacturers or
suppliers. If there are multiple third-party
manufacturers or suppliers (such as a case
in which a qualified manufacturer con-
tracts with a battery manufacturer, that, in
turn, contracts with a battery cell manu-
facturer or supplier that operates a battery
cell production facility), the due diligence
and information requirements of this para-
graph (c) must be satisfied by each third-
party manufacturer or supplier, either by
providing all required information directly
to the qualified manufacturer or indirectly
through contractual relationships.
(d) Compliant-battery ledger—(1) In
general. For new clean vehicles placed in
service after December 31, 2024, the qual-
ified manufacturer must determine and
provide information to the IRS to estab-
lish a compliant-battery ledger for each
calendar year, as described in paragraphs
(d)(2)(i) and (ii) of this section. The quali-
fied manufacturer may establish one com-
pliant-battery ledger for all vehicles for
a calendar year, or separate ledgers for
specific models or classes of vehicles to
account for different battery cell chemis-
tries or differing quantities of cells in each
clean vehicle battery.
(2) Determination of number of batter-
ies—(i) In general. To establish a compli-
ant-battery ledger for a calendar year, the
qualified manufacturer must determine
the number of clean vehicle batteries, with
respect to new clean vehicles for which
the qualified manufacturer anticipates pro-
viding a periodic written report during the
calendar year, that it knows or reasonably
anticipates will be FEOC-compliant, pur-
suant to the requirements of paragraphs
(b) and (c) of this section. The determi-
nation is based on the battery components
and applicable critical minerals (and asso-
ciated constituent materials) that are pro-
cured or contracted for the calendar year
and that are known or reasonably antici-
pated to be FEOC-compliant battery com-
ponents or FEOC-compliant applicable
critical minerals, as applicable.
(ii) Upfront review. The qualified man-
ufacturer must attest to the number of
FEOC-compliant clean vehicle batteries
determined under paragraph (d)(2)(i) of
this section and provide the basis for the
determination, including attestations, cer-
tifications and documentation demonstrat-
ing compliance with paragraphs (b) and
(c) of this section, at the time and in the
manner provided in the Internal Revenue
Bulletin (see §601.601 of this chapter).
The IRS, with analytical assistance from
the Department of Energy (DOE), will
review the attestations, certifications, and
documentation. Once the IRS determines
that the qualified manufacturer provided
the required attestations, certifications,
and documentation, the IRS will approve
or reject the determined number of
FEOC-compliant batteries. The IRS may
approve the determined number in whole
or part. The approved number is the initial
balance in the compliant-battery ledger.
(iii) Decrease or increase to compli-
ant-battery ledger—(A) Once the com-
pliant-battery ledger is established with
respect to a calendar year, the qualified
manufacturer must determine and take
into account any decrease in the number
of FEOC-compliant batteries for such cal-
endar year and any of the prior three cal-
endar years for which the qualified man-
ufacturer had a compliant-battery ledger,
within 30 days of discovery. In addition,
the qualified manufacturer may determine
and take into account any increase in the
number of FEOC-compliant batteries.
Such determinations, and any supporting
attestations, certifications, and documen-
tation, must be provided on a periodic
basis, in accordance with paragraph (d)
(2)(ii) of this section and the manner pro-
vided in the Internal Revenue Bulletin
(see §601.601 of this chapter).
(B) The decrease described in para-
graph (d)(2)(iii)(A) of this section may
decrease the compliant-battery ledger
below zero, creating a negative balance in
the compliant-battery ledger.
(C) If any decrease described in para-
graph (d)(2)(iii)(A) of this section is
determined subsequent to the calendar
year to which it relates, the decrease must
be taken into account in the year in which
the change is discovered.
(D) Any remaining balance in the com-
pliant-battery ledger at the end of the cal-
endar year, whether positive or negative,
will be included in the compliant-battery
ledger for the subsequent calendar year.
If a qualified manufacturer has multiple

Bulletin No. 2024–22 1315 May 28, 2024
negative compliant-battery accounts, any
negative balance will first be included in
the compliant-battery ledger for the same
model or class of vehicles for the subse-
quent calendar year. However, if there is
no ledger for the same model or class of
vehicles in the subsequent calendar year,
the IRS can account for such negative bal-
ance in the ledger of a different model or
class of vehicles of the qualified manufac-
turer.
(3) Tracking FEOC-compliant bat-
teries. The compliant-battery ledger for
a calendar year must be updated to track
the qualified manufacturer’s available
FEOC-compliant batteries, by reducing
the balance in the ledger as the qualified
manufacturer submits periodic written
reports reporting the vehicle identification
numbers of new clean vehicles as eligible
for the credit under section 30D, at the
time and in the manner provided in the
Internal Revenue Bulletin (see §601.601
of this chapter). If the balance in the com-
pliant-battery ledger of the qualified man-
ufacturer for a calendar year is zero or less
than zero, the qualified manufacturer may
not submit additional periodic written
reports with respect to section 30D until
the number of available FEOC-compliant
batteries is increased as described in para-
graph (d)(2)(iii)(A) of this section.
(4) Reconciliation of battery estimates.
After the end of any calendar year for
which a compliant-battery ledger is estab-
lished, the IRS may require a qualified
manufacturer to provide attestations, cer-
tifications, and documentation to support
the accuracy of the number of the qual-
ified manufacturer’s FEOC-compliant
batteries for such calendar year, including
with respect to any changes described in
paragraph (d)(2)(iii) of this section, at the
time and in the manner provided in the
Internal Revenue Bulletin (see §601.601
of this chapter).
(e) Rule for 2024—(1) In general. For
new clean vehicles that are placed in ser-
vice after December 31, 2023, and prior
to January 1, 2025, the qualified manu-
facturer must determine whether the bat-
tery components contained in the vehicles
satisfy the requirements of section 30D(d)
(7)(B), and whether batteries contained in
the vehicles are FEOC-compliant under
the rules of paragraphs (b) and (c) of this
section. The qualified manufacturer must
make an attestation with respect to such
determinations at the time and in the
manner provided in the Internal Revenue
Bulletin (see §601.601 of this chapter).
However, for any new clean vehicles for
which the qualified manufacturer provides
a periodic written report before June 5,
2024, provided that the qualified manufac-
turer has determined that its supply chains
for each battery component with respect
such vehicles contain only FEOC-compli-
ant battery components:
(i) For purposes of paragraphs (c)(2)
and (3) of this section, the determination
of which battery cells or clean vehicle bat-
teries, as applicable, contain FEOC-com-
pliant battery components may be made
without physical tracking;
(ii) For purposes of paragraph (c)
(2) of this section, the determination of
which clean vehicle batteries contain
FEOC-compliant battery cells may be
made without physical tracking (and with-
out the use of a serial number or other
identification system); and
(iii) For purposes of paragraph (c)(1)
of this section, the determination of which
vehicles contain FEOC-compliant batter-
ies may be made without physical track-
ing (and without the use of a serial number
or other identification system).
(2) Determination. The determination
that a qualified manufacturer’s supply
chains of each battery component contain
only FEOC-compliant battery compo-
nents may be made with respect to specific
models or classes of vehicles.
(f) Inaccurate attestations, certifica-
tions, or documentation—(1) In general.
If the IRS determines, with analytical
assistance from the DOE and after review
of the attestations, certification, and doc-
umentation described in paragraph (d) of
this section, that a qualified manufacturer
has provided attestations, certifications,
or documentation that contain inaccurate
information, the IRS may take appropriate
action, as described in paragraphs (f)(2)
and (3) of this section. Such action would
affect vehicles and qualified manufactur-
ers on a prospective basis.
(2) Inadvertence—(i) Inaccurate infor-
mation may be cured by qualified man-
ufacturer. If the IRS determines that the
qualified manufacturer’s attestations,
certifications, or documentation for a
specific new clean vehicle contain inac-
curate information due to inadvertence,
the qualified manufacturer may, within
a reasonable period of time after discov-
ery of the inaccurate information, cure
the errors, including by a decrease in the
compliant-battery ledger as described in
paragraph (d)(2)(iii) of this section. If the
qualified manufacturer has multiple com-
pliant-battery ledgers, the IRS may deter-
mine which ledger is to be decreased.
(ii) Consequences if errors not cured.
If the qualified manufacturer does not cure
the errors, the IRS may take any of the fol-
lowing actions:
(A) In the case of a new clean vehicle
that has not been placed in service but for
which the qualified manufacturer has sub-
mitted a periodic written report certifying
compliance with the requirements of sec-
tion 30D(d), the IRS may determine that
such vehicle is no longer considered a new
clean vehicle eligible for the section 30D
credit.
(B) In the case of a new clean vehicle
that has not been placed in service and for
which the qualified manufacturer has not
submitted a periodic written report certi-
fying compliance with the requirements
of section 30D(d), the qualified manufac-
turer may not submit such periodic written
report.
(C) In the case of a new clean vehicle
that has been placed in service, the IRS
may require a decrease in the qualified
manufacturer’s compliant-battery ledger
as described in paragraph (d)(2)(iii) of this
section. If the qualified manufacturer has
multiple compliant-battery ledgers, the
IRS may determine which ledger is to be
decreased.
(3) Intentional disregard or fraud. If
the IRS determines that a qualified man-
ufacturer intentionally disregarded attes-
tation, certification, or documentation
requirements, or reported information
fraudulently or with intentional disre-
gard, the IRS may take any of the actions
described in paragraph (f)(3)(i) or (ii) of
this section.
(i) All vehicles ineligible for credit. The
IRS may determine that all vehicles man-
ufactured by the qualified manufacturer
that have not been placed in service are
no longer considered new clean vehicles
eligible for the section 30D credit.
(ii) Termination of written agreement.
The IRS may terminate the written agree-

May 28, 2024 1316 Bulletin No. 2024–22
ment between the IRS and the manufac-
turer, thereby terminating the manufactur-
er’s status as a qualified manufacturer. In
such instance, the manufacturer would be
required to submit a new written agree-
ment to reestablish qualified manufac-
turer status at the time and in the manner
provided in the Internal Revenue Bulletin
(see §601.601 of this chapter).
(g) Rules inapplicable to new qualified
fuel cell motor vehicles. The requirements
of section 30D(d)(7) and this section do
not apply to new qualified fuel cell motor
vehicles.
(h) Examples. The following examples
illustrate the rules under paragraphs (b)
through (e) of this section:
(1) Example 1: In general—(i) Facts. M is a
manufacturer of new clean vehicles and batteries.
M also manufactures and assembles battery cells at
its own battery cell production facility. M manufac-
tures a line of new clean vehicles that it anticipates
will be placed in service in calendar year 2025. Each
vehicle contains one clean vehicle battery, and each
clean vehicle battery contains 1,000 battery cells. All
battery cells are produced at the same battery cell
production facility. The battery cells are not manu-
factured or assembled by a FEOC. Each battery cell
contains 10 units of battery component A. M has
procured or is under contract to procure 10,000,000
units of battery component A for the battery cell pro-
duction facility, of which 6,000,000 units are from
supplier 1 and 4,000,000 units are from supplier 2.
(ii) Analysis—(A) Under paragraph (b) of this
section, M must conduct due diligence on all battery
components and applicable critical minerals (and
associated constituent materials) that are contained
in the clean vehicle batteries to determine whether
such components or minerals are FEOC-compliant.
(B) Under paragraph (c)(4) of this section, M
must first determine whether the battery compo-
nents and applicable critical minerals (and asso-
ciated constituent materials) are FEOC-compli-
ant. From its due diligence, M determines that, of
the 10,000,000 units of battery component A, the
6,000,000 units from supplier 1 are FEOC-compli-
ant while the 4,000,000 units from supplier 2 are
not FEOC-compliant. M determines that all other
battery components and applicable critical minerals
(and associated constituent materials) of the battery
cells are FEOC-compliant, that the battery cell is
not manufactured or assembled by a FEOC, and
that all battery components (excluding components
of the battery cell) of the clean vehicle batteries are
FEOC-compliant.
(C) Under paragraph (c)(3) of this section, M must
determine which battery cells are FEOC-compliant
through the physical tracking of the 6,000,000 units
of FEOC-compliant battery component A to deter-
mine which 600,000 (6,000,000/10) battery cells
are FEOC-compliant. Under paragraph (c)(2) of this
section, M must use a serial number or other identifi-
cation system to track the 600,000 FEOC-compliant
battery cells to 600 (600,000/1,000) specific clean
vehicle batteries.
(D) Under paragraph (d)(1) of this section, a
compliant-battery ledger must be established for cal-
endar year 2025. For purposes of paragraph (d)(2)
(i) of this section, M determines that it will manu-
facture 600 batteries for calendar year 2025 that are
FEOC-compliant. Under paragraph (d)(2)(ii) of this
section, M attests to the 600 FEOC-compliant bat-
teries and provides the basis for the determination,
including attestations, certifications, and documenta-
tion demonstrating compliance with paragraphs (b)
and (c) of this section. Once the IRS, with analytical
assistance from the DOE, approves the number, a
compliant-battery ledger is established with a bal-
ance of 600 FEOC-compliant batteries.
(E) M manufactures 100 vehicles that it antici-
pates will be placed in service in 2025, for which
it provides periodic written reports providing the
vehicle identification numbers of the vehicles and
indicating that such vehicles qualify for the section
30D credit. Under paragraph (d)(3) of this section,
the compliant-battery ledger is updated to track the
number of FEOC-compliant batteries. The number
of FEOC-compliant batteries contained in the com-
pliant-battery ledger is reduced from 600 to 500.
Assuming all of the other requirements of section
30D and the regulations thereunder are met, the 100
vehicles are new clean vehicles for purposes of sec-
tion 30D.
(2) Example 2: Rules for third-party suppliers—
(i) Facts. The facts are the same as in paragraph (h)
(1)(i) of this section (facts of Example 1), except that
M contracts with a battery manufacturer, BM, for the
provision of clean vehicle batteries, and BM con-
tracts with a battery cell supplier, BCS, that operates
a battery cell production facility, for the provision of
battery cells.
(ii) Analysis. Under paragraph (c)(5) of this sec-
tion, BCS may make the determination in paragraphs
(c)(2) through (4) of this section, provided that M,
BM, and BCS perform due diligence as described in
paragraph (b) of this section. In addition, BM and
BCS must provide M with information sufficient to
establish a basis for the determinations under para-
graphs (c)(2) through (4) of this section, including
information related to due diligence. Finally, BM and
BCS must be contractually required to provide the
required information to M, and must also be required
to inform the qualified manufacturer of any change
in supply chains that affects the determinations of
FEOC compliance under paragraphs (c)(2) and (4)
of this section. The contractual requirement may be
satisfied if BM and BCS each have the contractual
obligation to M. Alternatively, it may be satisfied if
BCS has a contractual obligation to BM and BM, in
turn, has a contractual obligation to M.
(3) Example 3: Applicable critical minerals—(i)
Facts. The facts are the same as in paragraph (h)
(1)(i) of this section (facts of Example 1). In addi-
tion, each battery cell contains 20 kilograms (kg) of
applicable critical mineral Z (ACM-Z) contained in
a constituent material. M has procured or is under
contract to procure 20,000,000 kg of ACM-Z for the
battery cell production facility, of which 4,000,000
kg are from supplier 3 and 16,000,000 kg are from
supplier 4.
(ii) Analysis. The analysis is the same as in para-
graph (h)(1)(ii) of this section (analysis of Example
1). In addition, from its due diligence, M determines
that of the 20,000,000 kg of ACM-Z, the 4,000,000
kg from supplier 3 is FEOC-compliant while the
16,000,000 kg from supplier 4 is not FEOC-compli-
ant. Under paragraph (c)(3) of this section, M may
determine which battery cells are FEOC-compliant
through the physical tracking of the 4,000,000 kg of
FEOC-compliant ACM-Z to 200,000 (4,000,000/20)
of the battery cells that also contain battery com-
ponent A, in order to determine which 200,000
battery cells are FEOC-compliant. Alternatively,
M may determine which 200,000 battery cells are
FEOC-compliant through an allocation of ACM-Z
(but not battery component A) to battery cells, with-
out physical tracking, under paragraph (c)(3)(ii) of
this section. Under paragraph (c)(2) of this section,
M must use a serial number or other identification
system to track the 200,000 FEOC-compliant battery
cells to 200 (200,000/1,000) specific clean vehicle
batteries.
(4) Example 4: Comprehensive example—(i)
Facts. M is a manufacturer of new clean vehicles
and batteries. M also manufactures or assembles bat-
tery cells at its own battery cell production facility.
M manufactures a line of new clean vehicles. Each
vehicle contains one battery. All battery cells are
produced at the same battery cell production facility.
The battery cells are not manufactured or assembled
by a FEOC. Each battery contains 1,000 NMC 811
battery cells. M anticipates manufacturing 1,000,000
such battery cells for a line of new clean vehicles
that it anticipates will be placed in service in calen-
dar year 2025.
(A) Each battery cell contains 1 cathode elec-
trode, 1 anode electrode, 1 separator, and 1 liquid
electrolyte. Thus, M procures 1,000,000 units of
each battery component for the battery cell produc-
tion facility.
(B) In addition, each NMC 811 cathode incorpo-
rates cathode active material (a constituent material)
produced using 2.5 kg of applicable critical minerals,
consisting of 0.5 kg of lithium hydroxide, 1.6 kg of
nickel sulfate, 0.2 kg of cobalt sulfate, and 0.2 kg of
manganese sulfate. Thus, M procures 2,500 metric
tons (2.5 kg x 1,000,000 / 1,000) of applicable crit-
ical minerals for the battery cell production facility,
resulting in purchase agreements for 500 metric tons
of lithium, 1,600 metric tons of nickel, 200 metric
tons of cobalt, and 200 metric tons of manganese.
(ii) Analysis—(A) Under paragraph (b) of this
section, M must conduct due diligence on all battery
components and applicable critical minerals (and
associated constituent materials) that are contained
in the clean vehicle batteries to determine whether
such components or minerals are FEOC-compliant.
(B) Under paragraph (c)(4) of this section, M
must first determine whether the battery components
and applicable critical minerals (and associated con-
stituent materials) are FEOC-compliant. From its
due diligence M determines that, of the cathode elec-
trodes, 600,000 are not manufactured by a FEOC and
are therefore FEOC-compliant; 400,000 are manu-
factured by a FEOC and are therefore non-compliant.
Because each battery cell contains 1 cathode elec-
trode, a maximum of 600,000 battery cells would be
FEOC-compliant. Of the critical minerals that M has
procured, M determines that 250 metric tons of lith-
ium hydroxide, 1,200 metric tons of nickel sulfate,
and all of the cobalt sulfate and manganese sulfate

Bulletin No. 2024–22 1317 May 28, 2024
are FEOC-compliant. M determines that all other
battery components and applicable critical minerals
of the battery cells are FEOC-compliant.
(C) Under paragraph (c)(3) of this section, M
must determine which battery cells are FEOC-com-
pliant through the physical tracking of battery com-
ponents. M may determine which battery cells are
FEOC-compliant through the physical tracking of
applicable critical minerals. Alternatively, M may
determine which battery cells are FEOC-compliant
through an allocation of applicable critical minerals
(and associated constituent materials) but not battery
components.
(D) Under an allocation-based determination, M
has procured 500 metric tons of lithium hydroxide
incorporated into a constituent material for the bat-
tery cell production facility, of which 50% (250 / 500
metric tons) is FEOC-compliant. M has procured
1,600 metric tons of nickel sulfate incorporated
into a constituent material for the battery cell pro-
duction facility, of which 75% (1,200 / 1,600 met-
ric tons) is FEOC-compliant. Because the lithium
hydroxide is the least compliant applicable critical
mineral or component, M allocates the FEOC-com-
pliant lithium hydroxide mass to 50% or 500,000
(50% x 1,000,000) of the total battery cells, and to
battery cells that contain FEOC-compliant cathode
electrodes and have been allocated FEOC-compli-
ant nickel sulfate. Under paragraph (c)(3)(ii)(E) of
this section, the quantity of FEOC-compliant battery
cells is limited by the applicable critical mineral
(lithium hydroxide) that has the lowest percentage
(50%) of FEOC-compliant supply.
(E) Under paragraph (c)(2) of this section, M
must use a serial number or other identification sys-
tem to track the 500,000 FEOC-compliant battery
cells to 500 (500,000/1,000) specific clean vehicle
batteries.
(F) Under paragraph (d)(1) of this section, a
compliant-battery ledger must be established for cal-
endar year 2025. For purposes of paragraph (d)(2)
(i) of this section, M determines that it will manu-
facture 500 batteries for calendar year 2025 that are
FEOC-compliant, allocating its FEOC-compliant
applicable critical minerals to the cells containing
FEOC-compliant battery components. Under para-
graph (d)(2)(ii) of this section, M attests to the 500
FEOC-compliant batteries and provides the basis for
the determination, including attestations, certifica-
tions, and documentation demonstrating compliance
with paragraphs (b) and (c) of this section. Once the
IRS, with analytical assistance from the DOE, has
approved the number, a compliant-battery ledger is
established with a balance of 500 FEOC-compliant
batteries.
(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 agencies’ intention that the remain-
ing provisions will continue in effect.
(j) Applicability date. This section
applies to new clean vehicles placed in
service after December 31, 2023, in tax-
able years ending after December 31,
2023.
PART 301—PROCEDURE AND
ADMINISTRATION
Par 4. 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 5. 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 Reve-
nue 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 credit for qualified
commercial clean vehicles) 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.
Approved: April 21, 2024.
Aviva Aron-Dine,
Acting Assistant Secretary of the Treasury
(Tax Policy).
(Filed by the Office of the Federal Register May 3,
2024, 8:45 a.m., and published in the issue of the
Federal Register for July 5, 2024, 89 FR 37706)
26 CFR 26.2642-7: Relief under section 2642(g)(1)
T.D. 9996
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Parts 26, 301,
and 602
Relief Provisions
Respecting Timely
Allocation of GST
Exemption and Certain GST
Elections
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final rule.

May 28, 2024 1318 Bulletin No. 2024–22
SUMMARY: This document contains
final regulations that provide guidance
describing the circumstances and proce-
dures under which an extension of time
will be granted to make certain alloca-
tions and elections related to the genera-
tion-skipping transfer (GST) tax. The stat-
utory provision underlying these rules was
enacted as part of the Economic Growth
and Tax Relief Reconciliation Act of 2001
(EGTRRA). The guidance affects individ-
uals (or their estates) who failed to make
a timely allocation of GST exemption, a
timely election out of the GST automatic
allocation rules, or certain other timely
GST elections.
DATES: Effective date: These regulations
are effective on May 6, 2024.
Applicability date: For dates of appli-
cability, see §§26.2642-7(j), 301.9100-
2(f)(2), and 301.9100-3(g)(2).
FOR FURTHER INFORMATION
CONTACT: Mayer R. Samuels at (202)
317-6859 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
This document contains final regula-
tions in 26 CFR parts 26, 301, and 602
that provide guidance on the application
of section 2642(g)(1) of the Internal Reve-
nue Code (Code), which describes the cir-
cumstances and procedures under which
an extension of time will be granted to
make certain allocations and elections
related to the GST tax.
Congress added section 2642(g)(1) to
the Code by enacting section 564 of the
EGTRRA, Public Law 107-16, section
564, 115 Stat. 91 (2001). Section 2642(g)
(1) directs the Secretary of the Treasury
or her delegate (Secretary) to issue regu-
lations prescribing the circumstances and
procedures under which an extension of
time will be granted to make an allocation
of GST exemption, as described in sec-
tion 2631 of the Code, to a transfer, and
the following three elections under section
2632 of the Code: (1) an election under
section 2632(b)(3) not to have the deemed
(automatic) allocation of GST exemption
apply to a direct skip (generally, a transfer
subject to gift or estate tax made to a per-
son more than one generation below the
transferor); (2) an election under section
2632(c)(5)(A)(i) not to have the deemed
(automatic) allocation of GST exemp-
tion apply to an indirect skip or to trans-
fers made to a particular trust; and (3) an
election under section 2632(c)(5)(A)(ii)
to treat any trust as a GST trust for pur-
poses of section 2632(c). In determining
whether to grant relief, section 2642(g)(1)
directs that all relevant circumstances be
considered, including evidence of intent
contained in the trust instrument or the
instrument of transfer.
The legislative history accompany-
ing section 2642(g)(1) indicates that
Congress believed that, in appropriate
circumstances, an individual should be
granted an extension of time to allocate
GST exemption regardless of whether any
period of limitations had expired. Those
circumstances include situations in which
the taxpayer intended to allocate GST
exemption and the failure to allocate the
exemption was inadvertent. H.R. Conf.
Rep. No. 107-84, 202 (2001).
After the enactment of section 2642(g)
(1), the IRS issued Notice 2001-50 (2001-2
CB 189), which provided guidance for
transferors seeking an extension of time
to make an allocation of GST exemp-
tion or an election described in sections
2632(b)(3) or (c)(5). Notice 2001-50 pro-
vides, generally, that relief will be granted
under §301.9100-3 of the Procedure and
Administration Regulations (regarding
requests of extensions of time for certain
regulatory elections) if the taxpayer satis-
fies the requirements of those regulations
and establishes to the satisfaction of the
Commissioner of Internal Revenue or his
delegate (Commissioner) that the taxpayer
acted reasonably and in good faith and
that a grant of the requested relief will not
prejudice the interests of the government.
If relief is granted under §301.9100-3
and the allocation is made, the amount of
GST exemption allocated to the transfer is
the Federal gift or estate tax value of the
property as of the date of the transfer and
the allocation is effective as of the date of
the transfer. Notice 2001-50 will be made
obsolete upon the publication of this Trea-
sury decision in the Federal Register.
On August 2, 2004, the IRS issued Rev.
Proc. 2004-46 (2004-2 CB 142), which
provides a simplified alternate method
to obtain an extension of time to allo-
cate GST exemption in certain situations.
Generally, this method is available only
with respect to an inter vivos transfer to
a trust from which a GST may be made
and only if each of the following require-
ments is met: (1) The transfer qualified
for the gift tax annual exclusion under
section 2503(b) of the Code; (2) the sum
of the amount of the transfer and all other
gifts by the transferor to the donee in the
same year did not exceed the applicable
annual exclusion amount for that year; (3)
no GST exemption was allocated to the
transfer; (4) the taxpayer has unused GST
exemption to allocate to the transfer as of
the filing of the request for relief; and (5)
no taxable distributions or taxable termi-
nations have occurred as of the filing of
the request for relief.
On August 9, 2004, the IRS issued Rev.
Proc. 2004-47 (2004 CB 169), which pro-
vides alternative relief for taxpayers who
failed to make a reverse qualified termina-
ble interest property (QTIP) election on an
estate tax return.
On April 17, 2008, proposed regula-
tions (REG-147775-06) were published in
the Federal Register (73 FR 20870). The
proposed regulations provided guidance
on the application of section 2642(g)(1) by
identifying the standards that the IRS will
apply in determining whether to grant a
transferor or a transferor’s estate an exten-
sion of time to make an allocation of GST
exemption, as described in section 2631,
to property transferred by the transferor
and the following three elections under
section 2632: (1) an election under section
2632(b)(3) not to have the automatic allo-
cation of GST exemption apply to a direct
skip; (2) an election under section 2632(c)
(5)(A)(i) not to have the automatic alloca-
tion of GST exemption apply to an indi-
rect skip or to transfers made to a particu-
lar trust; and (3) an election under section
2632(c)(5)(A)(ii) to treat any trust as a
GST trust for purposes of section 2632(c).
In addition to proposing these standards,
the proposed regulations included proce-
dural requirements for establishing eligi-
bility for the requested relief, including
identification of the various persons from
whom affidavits would be required.
In order to evaluate the necessity for
and determine the burden imposed by the
requirement to produce affidavits under

Bulletin No. 2024–22 1319 May 28, 2024
proposed §26.2642-7(h), the proposed
regulations requested comments specifi-
cally as to (1) whether the affidavits are
necessary for the proper performance
of the functions of the IRS, including
whether the information provided by
the affidavits will have practical utility,
(2) the accuracy of the estimated burden
associated with preparing the affidavits,
(3) how the quality, utility, and clarity
of the information to be provided by the
affidavits may be enhanced, (4) how the
burden of providing the affidavits may be
minimized, including through the appli-
cation of automated collection techniques
or other forms of information technology,
and (5) estimates of capital or start-up
costs and costs of operation, maintenance,
and purchase of services to provide the
affidavits.
The proposed regulations also identi-
fied situations that do not satisfy the stan-
dards for granting relief, and thus when
the IRS will not grant the requested relief.
The IRS received a total of five com-
ments, three of which explicitly addressed
the procedural requirements of proposed
§26.2642-7(h), redesignated in the final
regulations as §26.2642-7(i). After careful
consideration of the comments received
on the proposed regulations, this Treasury
decision adopts the proposed regulations
with clarifying changes and additional
modifications in response to comments as
described in the Summary of Comments
and Explanation of Revisions. Relief pro-
vided under section 2642(g)(1) will be
granted through the IRS private letter rul-
ing program.
Section 301.9100-1 generally provides
that the Commissioner has the discretion
to grant a reasonable extension of time
under the rules set forth in §§301.9100-2
and 301.9100-3 to make a regulatory
election under all subtitles of the Code,
except subtitles E, G, H, and I (section
9100 provisions). On and after the date
of publication of these final regulations,
relief under section 2642(g)(1) no longer
will be granted under §301.9100-3. In
addition, because these final regulations
provide a replacement for the automatic
six-month extension under §301.9100-
2(b) without substantive difference,
the extension under §301.9100-2(b) no
longer will be available to transferors
or transferor’s estates qualifying for
relief under proposed §26.2642-7(h)(1),
redesignated in the final regulations as
§26.2642-7(i)(1), on and after the date
of publication of these final regulations.
Accordingly, the final regulations amend
§§301.9100-2(b) and 301.9100-3 to pro-
vide that relief under section 2642(g)(1)
cannot be obtained through the provi-
sions of §§301.9100-2(b) and 301.9100-
3. However, requests that are pending
with the IRS on the date of publication
of these final regulations will continue
to be processed under the section 9100
provisions unless the taxpayer request-
ing relief opts to withdraw the request
and instead seek relief under these final
regulations. In that case, the taxpayer’s
user fee will be refunded and a new user
fee will be required with the new request.
Furthermore, the procedures contained
in Revenue Procedure 2004-46 and Rev-
enue Procedure 2004-47 will remain
effective for transferors within the scope
of those revenue procedures.
The Department of the Treasury
(Treasury Department) and the IRS are
mindful that the proposed regulations
were issued 16 years ago on April 17,
2008. Insofar as there have been no inter-
vening legislative or regulatory changes
regarding allocations of GST exemption
or GST elections and because the issues
addressed by the commenters on the pro-
posed regulations continue to remain rel-
evant, the Treasury Department and the
IRS have determined that a new notice
of proposed rulemaking or a further
opportunity for public comment would
be unlikely to generate different com-
ments and, moreover, would unnecessar-
ily delay further this rulemaking to the
continued detriment of taxpayers seeking
relief. In addition, the IRS has a ruling
position that, because of the provisions
of the 2008 proposed regulations, relief
cannot be granted in certain otherwise
appropriate situations until the 2008 pro-
posed regulations have been superseded
by the issuance of these final regulations.
For such situations, the issuance of a
new notice of proposed rulemaking or a
reopening of the comment period would
further delay, and in some cases prevent,
the grant of needed relief to taxpayers.
The Treasury Department and the IRS
currently are developing a new rulemak-
ing that will complement these final reg-
ulations. In contrast to these final regu-
lations, which address the standards for
granting relief under section 2642(g)(1)
for a failure to make a timely allocation or
election, the forthcoming proposed regu-
lations would address the practical effect
of a grant of relief and would clarify the
interplay between affirmative allocations
and automatic allocations. Paragraphs in
these final regulations have been reserved
to accommodate the forthcoming pro-
posed regulations.
Summary of Comments and
Explanation of Revisions
I. Scope of Authority to Issue Regulations
Section 2642(g)(1) gives the Secretary
the authority to issue regulations setting
forth the “circumstances and procedures”
under which extensions of time will be
granted to make certain allocations of
GST exemption and elections, taking into
consideration all relevant circumstances,
including evidence of intent contained in
the trust instrument or instrument of trans-
fer and such other factors as the Secretary
deems relevant. Section 2642(g)(1) makes
the late allocations and elections refer-
enced in that section eligible for consid-
eration for relief. Because deadlines pre-
scribed by statute are not eligible for relief
under §301.9100-3, section 2642(g)(1)(B)
concludes with the sentence, for purposes
of determining whether to grant relief
under this paragraph, the time for making
the allocation (or election) shall be treated
as if not expressly prescribed by statute.
Some commenters maintained that this
sentence, creating eligibility for a grant
of relief, limits the authority of the Trea-
sury Department and the IRS to issue reg-
ulations that provide standards for relief
that are more restrictive than those under
§301.9100-3. Neither the statute nor its
legislative history suggests that the stan-
dards for relief under section 2642(g)(1)
are required to be equivalent or limited to
the standards set forth in §301.9100-3, nor
is there any implication that the enactment
of section 2642(g) prohibits or forecloses
the possibility of any future change to the
regulatory standards in §301.9100-3. Nev-
ertheless, the final regulations adopt bur-
den reducing provisions as explained later
in this preamble.

May 28, 2024 1320 Bulletin No. 2024–22
II. Proposed §26.2642-7(d)(2) –
Reasonableness and Good Faith
Proposed §26.2642-7(d)(2) provides
a nonexclusive list of circumstances (the
underlying facts of which may be either
helpful or harmful to the taxpayer’s
request for relief) that the IRS will con-
sider in determining whether the trans-
feror or the transferor’s executor acted
reasonably and in good faith.
Commenters requested that the Trea-
sury Department and the IRS modify pro-
posed §26.2642-7(d)(2) to provide that
the transferor or the executor of the trans-
feror’s estate will be deemed to have acted
reasonably and in good faith if the taxpayer
establishes the existence of any one of the
various factors listed in §26.2642-7(d)(2).
Alternatively, commenters requested that
§26.2642-7(d)(2) be clarified to denote
the sufficiency or relative importance of
the factors listed.
Section 2642(g)(1) directs the Treasury
Department and the IRS to issue regula-
tions that “prescribe such circumstances
and procedures” under which the IRS will
grant relief. Since the enactment of sec-
tion 2642(g) and through the IRS private
letter ruling program, the IRS has applied
a facts and circumstances methodology in
considering requests for relief. Given the
inherent complexity of the GST exemp-
tion rules, no single factor can be deter-
minative. While §301.9100-3(b)(1) deems
the reasonableness and good faith require-
ments to have been met if the taxpayer
establishes any one of the factors therein,
that rule is expressly made subject to the
requirement of the absence of the use of
hindsight and the other factors described
in §301.9100-3(b)(3) and (c), and thus is
not a one-factor test. Accordingly, pro-
posed §26.2642-7(d)(2) seeks to delineate
the many factors implicit in such a facts
and circumstances inquiry, and the final
regulations adopt the same methodology.
The IRS’s experience with requests for
relief under section 2642(g)(1) indicates
that no one factor has more importance
in all cases than any other factor. Further,
the satisfaction of one factor alone may or
may not be sufficient, in the context of the
facts and circumstances of that particular
taxpayer, to persuade the IRS that relief
under section 2642(g)(1) is warranted.
Therefore, the recommendation to allow
one factor to be determinative has not
been adopted in the final regulations. Nev-
ertheless, the final regulations clarify that
not all of these factors may be relevant in a
particular situation (and those that are not
relevant would not need to be addressed in
the request for relief). In addition, based
on all the facts and circumstances, a single
factor listed in §26.2642-7(d)(2) may (or
may not) be determinative.
Section 301.9100-3(b)(1)(i) provides
that a taxpayer is deemed to have acted
reasonably and in good faith if the tax-
payer requests relief before the failure to
make the regulatory election is discovered
by the IRS. A commenter requested that
this circumstance be added to the factors
listed in this provision. Thus, a taxpayer
would be considered to have acted rea-
sonably and in good faith if the taxpayer’s
request for relief was filed before the fail-
ure to make the allocation or regulatory
election is discovered by the IRS. For
purposes of section 2642(g)(1), the Trea-
sury Department and the IRS have deter-
mined that this circumstance is not mate-
rial because, in the context of a request
for relief under section 2642(g)(1), the
Treasury Department and the IRS believe
that the party that first discovers the fail-
ure to make the allocation or election (be
it the IRS or the taxpayer) generally has
no correlation with the taxpayer’s good
faith or reasonable action. Particularly
because of the significant length of time
that often elapses between the transfer and
the discovery of a missed GST election or
allocation, the discovery by the IRS does
not necessarily signify a lack of good faith
or reasonable action by the taxpayer. At
the same time, the taxpayer’s discovery
generally does not guarantee the existence
of good faith and reasonable action by the
taxpayer. Therefore, this factor has not
been added to the final regulations. How-
ever, a delay in requesting relief, after the
need for relief is discovered, may have
an adverse effect on the availability of
relief. See, for example, the circumstances
described in §26.2642-7(d)(3)(ii) and (e)
(3).
III. Proposed §26.2642-7(d)(2)(iv) --
Consistency
Proposed §26.2642-7(d)(2)(iv) pro-
vides that one of the factors to be consid-
ered in determining whether the taxpayer
has acted reasonably and in good faith is
whether the transferor acted consistently
with regard to the allocation of the trans-
feror’s GST exemption. Section 26.2642-
7(d)(2)(iv) is designed to elicit informa-
tion relevant to the intent of the transferor
with regard to allocating exemption or
making an election. For instance, a trans-
feror’s pattern of allocating GST exemp-
tion in an amount equal to the value of
transfers to a trust in three or more years
(whether or not consecutive) tends to
support an assumption that the transferor
intended to have that trust be exempt from
GST tax and thus supports a presumed
intent to allocate exemption to a transfer
to that same trust taking place in a year in
which an allocation in fact was not made.
A commenter requested that this provi-
sion be clarified to provide that the enact-
ment of the statute itself be deemed to be a
change in circumstance that could explain
any post-enactment deviations from
pre-enactment decisions regarding the
allocation of GST exemption. In response
to this comment, §26.2642-7(d)(2)(iv) has
been modified in the final regulations to
confirm that relief under this provision
will not be denied merely because a pat-
tern does not exist or because the existing
pattern changed at some point, whether in
response to the enactment of a statute or to
some other factor unrelated to either a lack
of reasonableness or good faith or preju-
dice to the interests of the government.
IV. Proposed §26.2642-7(d)(3)
-- Prejudice to the Interests of the
Government
One commenter queried the placement
of two of the factors under §26.2642-7(d)
(3) pertaining to whether a grant of relief
would prejudice the interests of the gov-
ernment. These two factors are (i) the
extent to which the requested relief is an
attempt to benefit from hindsight, and (ii)
the extent to which a delay in the filing
of the request for relief was an attempt to
deprive the IRS of sufficient time to chal-
lenge the claimed identity of the transferor
of the transferred property that is the sub-
ject of the request for relief, the value of
that transferred property for Federal gift
or estate tax purposes, or any other aspect
of the transfer that is relevant for Federal

Bulletin No. 2024–22 1321 May 28, 2024
gift or estate tax purposes. The commenter
recommended that these two factors, to
the extent they deal with the transferor’s
subjective intentions, be moved from
proposed §26.2642-7(d)(3) to proposed
§26.2642-7(d)(2), which relates to reason-
ableness and good faith.
While these two factors may reflect
unreasonableness or bad faith on the part
of the transferor or the transferor’s exec-
utor, each of these factors also represents
an instance in which granting relief would
prejudice the interests of the government.
Therefore, the Treasury Department and
the IRS have not adopted this suggestion
in the final regulations.
V. Proposed §26.2642-7(d)(3)(i) –
Hindsight
Proposed §26.2642-7(d)(3)(i) pro-
vides, in part, that one of the relevant
factors in determining whether the gov-
ernment’s interests would be prejudiced is
whether the grant of the requested relief
would permit an economic advantage or
other benefit that would not have been
available if the allocation or election had
been timely made. A commenter sug-
gested that the definition of the term “eco-
nomic advantage” is vague and may be
overbroad, in that no request for relief is
ever made unless the grant of relief will be
advantageous to the taxpayer by produc-
ing an economic advantage in the form of
a reduction of tax liability. This provision,
however, is intended to limit the reference
to economic advantage to an advantage
that may not have been available through
a timely allocation or election. One exam-
ple of an economic advantage that would
not have been available at the time of a
timely allocation of GST exemption
would be a request to allocate exemption
to only one of two trusts (specifically, to
the trust with the greater appreciation) if
the two trusts were created on the same
date with the same beneficiaries but with
different assets. Therefore, the Treasury
Department and the IRS have not adopted
this suggestion in the final regulations.
VI. Proposed §26.2642-7(d)(3)(ii) --
Timing of the Request for Relief
Proposed §26.2642-7(d)(3)(ii) pro-
vides, in part, that the expiration of any
period of limitations on the assessment or
collection of transfer taxes prior to the fil-
ing of a request for relief will not by itself
prohibit a grant of relief. The proposed
regulation further states that the combina-
tion of the expiration of a period of limita-
tions with the fact that the asset or interest
was valued with the use of a valuation
discount will not by itself prohibit a grant
of relief. A commenter indicated that the
relevance of the use of valuation discounts
and the period of limitations in determin-
ing whether to grant section 2642(g)(1)
relief is not clear. The commenter stated
that the use of valuation discounts that
are consistent with established valuation
methods neither prejudices the govern-
ment nor constitutes an act of bad faith
and therefore should not be considered,
even in combination with other factors,
in determining whether relief should be
granted. The commenter also stated that
any consideration given to the expiration
of the period of limitations is contrary to
the legislative history of section 2642(g),
which clearly directs that the IRS is to
disregard the expiration of any period of
limitations in considering requests for
relief. The commenter maintains that the
IRS should not use hindsight to deny relief
simply because the IRS failed to chal-
lenge the valuation of transferred prop-
erty or any other aspect of the transaction
reported on a return prior to the expiration
of a limitations period.
The sentences of proposed §26.2642-
7(d)(3)(ii) that discuss the expiration of
the period of limitations and the use of
valuation discounts as factors that are
considered for relief are removed from
the final regulations. Section 26.2642-7(d)
(3)(iv) is added to the final regulations to
confirm that, subject to the considerations
related to the timing of the request for
relief described in §26.2642-7(d)(3)(ii),
the expiration of the period of limitations
on the assessment or collection of trans-
fer taxes prior to the filing of a request for
relief generally is not relevant to the deter-
mination of whether the requirements for
a grant of relief under section 2642(g)
(1) have been met. Section 26.2642-7(d)
(3)(iv) provides, however, that if the IRS
concludes that the value of the transferred
asset or assets as reported by the transferor
or the executor of the transferor’s estate on
the Federal gift or estate tax return was so
understated that it is likely to have satisfied
the definition of a “gross valuation mis-
statement” as defined in section 6662(h)
(2)(C) of the Code, the IRS will consider
the purported transfer tax undervaluation
in determining whether a grant of relief
would prejudice the interests of the gov-
ernment. This provision is tied to the defi-
nition of a gross valuation misstatement to
confirm that the perceived understatement
in value would have to be exceptional in
degree to raise the possibility of prejudice
to the interests of the government. This
provision is relevant only if the period of
limitations on assessment or collection for
transfer tax purposes expired before the
filing of the request for relief.
VII. Proposed §26.2642-7(d)(3)(iii) --
Intervening Taxable Events
Proposed §26.2642-7(d)(3)(iii) pro-
vides that the occurrence and effect of an
intervening taxable termination or taxable
distribution will be considered in deter-
mining whether the interests of the gov-
ernment would be prejudiced by granting
relief. The proposed regulations further
state that the interests of the government
may be prejudiced if a taxable termination
or taxable distribution occurred between
the time for making a timely allocation
of GST exemption or a timely election
described in section 2632(b)(3) or (c)(5)
and the time at which the request for relief
under this section was filed. A commenter
requested that this language be removed
from the final regulations and replaced
with a sentence or example indicating
that the existence of a GST tax liability
when relief is requested is not relevant in
determining whether relief under section
2642(g)(1) will be granted. Alternatively,
the commenter requested that the final
regulations provide that these rules not
apply if the period of limitations on the
assessment of resulting GST tax has not
expired when relief is requested. In addi-
tion, the commenter requested that the
final regulations provide transferors with
the option of paying the GST tax resulting
from the taxable termination or taxable
distribution occurring prior to submission
of the request for relief, or of forfeiting
any refund of GST tax to which the trans-
feror otherwise would be entitled upon the
grant of relief.

May 28, 2024 1322 Bulletin No. 2024–22
These recommendations have not been
adopted in the final regulations. Although
an intervening taxable distribution or tax-
able termination itself does not necessarily
bar a grant of relief under section 2642(g)
(1), it may be relevant in identifying the
existence of hindsight or in ascertaining
the intent of the transferor. In addition,
the difficulty and complexity of making
all of the related adjustments caused by a
grant of relief (including, for example, the
grantor’s willingness to pay any GST tax
liability and any transfer tax consequences
of that payment), some of which might also
impact other taxpayers, will be a factor to
be considered in determining whether the
government’s interests would be preju-
diced.
VIII. Proposed §26.2642-7(e)(1) --
Timely Allocations and Elections
Proposed §26.2642-7(e)(1) provides
that relief will not be granted to decrease
or revoke a timely allocation of GST
exemption as described in §26.2632-1(b)
(4)(ii)(A)(1), or to revoke an election
under section 2632(b)(3) or (c)(5) made
on a timely filed Federal gift or estate tax
return. Section 2631(b) provides that an
allocation of GST exemption under sec-
tion 2631(a), once made, is irrevocable.
No statute, however, provides that an elec-
tion made under section 2632(b)(3) or (c)
(5) is irrevocable.
Accordingly, proposed §26.2642-7(e)
(1), redesignated in the final regulations
as §26.2642-7(e)(2), does not include the
statement that relief is not available to
revoke an election under section 2632(b)
(3) or (c)(5) made on a timely filed Federal
gift or estate tax return. Such relief may be
available provided that the requirements
of §26.2642-7 of these final regulations
are satisfied. Further, as described below,
the final regulations, as they pertain to
timely allocations, include three narrow
exceptions that allow for relief from affir-
mative allocations of GST exemption.
Proposed §26.2642-7(e)(1), redesig-
nated in the final regulations as §26.2642-
7(e)(2), has been further modified to
clarify that the allocation and election
referred to is an affirmative (not an auto-
matic) allocation or election. The Treasury
Department and the IRS will address the
effect of a grant of relief on automatic
allocations in future guidance to be issued
under section 2642(g).
A commenter indicated that it is not
clear whether proposed §26.2642-7(e)(1)
also applies to allocations of GST exemp-
tion with respect to transfers made at death.
This rule has been clarified in the final reg-
ulations to encompass transfers made at
death and confirms that relief will not be
granted to decrease or revoke an affirma-
tive allocation (as opposed to an automatic
allocation) of GST exemption, regardless
of whether the transfer or the allocation of
exemption was made during a transferor’s
life or upon the transferor’s death.
The commenter further requested that
the provision be modified to provide that
affirmative allocations (as opposed to
automatic allocations) of exemption or
elections made on a timely filed estate tax
return of the estate of a decedent dying
prior to 2001 be exempted from this provi-
sion because section 2642(g)(1) relief was
not available before December 31, 2000.
Although this recommendation has not
been adopted in the final regulations for
all such allocations of exemption, relief
from the problem raised by this comment
is provided by the third of the excep-
tions included in the final regulations, as
described in the following paragraphs.
The final regulations have been mod-
ified to include three narrow exceptions
that allow for relief from affirmative allo-
cations and elections. The first exception
is that an allocation of GST exemption to
a transfer or a trust (other than a charita-
ble lead annuity trust (CLAT) or a trust
subject to an estate tax inclusion period
(ETIP) before the termination of the lead
interest or ETIP, respectively) is void
to the extent that the amount allocated
exceeds the amount necessary to obtain an
inclusion ratio of zero. See §26.2632-1(b)
(4)(i). (The allocation of exemption to a
CLAT upon its creation may turn out to be
insufficient or excessive for the purpose
of making the CLAT fully GST exempt,
but the allocation will not be voided. The
allocation of exemption to a trust subject
to an ETIP does not become irrevocable
until the termination of the ETIP.)
The second exception is that an allo-
cation is void if the allocation is made
with respect to a trust that, at the time
of the allocation, has no GST potential
with respect to the transferor making the
allocation. For this purpose, a trust has
GST potential even if the possibility of a
GST is so remote as to be negligible. See
§26.2632-1(b)(4)(i).
The third exception is that a late alloca-
tion (as defined in section 2642(b)(3)) will
be deemed to be void as part of the relief
granted under section 2642(g) if the late
allocation was made in an effort to miti-
gate the tax consequences of the missed
allocation that is the subject of the grant
of relief and that was not eligible for relief
prior to the enactment of section 2642(g)
(1). Specifically, such a late allocation is
deemed to be void if (1) prior to Decem-
ber 31, 2000, a transfer was made to a trust
with GST potential with respect to the
transferor; (2) a timely allocation of GST
exemption to the trust was not made; (3)
prior to December 31, 2000, a late alloca-
tion of GST exemption was made to the
trust; (4) the late allocation is disclosed
as part of the request for relief or during
the IRS’s consideration of that request;
and (5) relief under section 2642(g)(1) is
granted to make a timely allocation to the
transfer made prior to December 31, 2000.
Finally, the commenter questioned
what effect a grant of relief under sec-
tion 2642(g)(1) has on a timely allocation
(whether affirmative or automatic) of the
same transferor’s GST exemption to a
transfer made subsequent to the transfer
for which relief is requested. The com-
menter suggested that, if relief is granted
under section 2642(g)(1) to timely allo-
cate GST exemption to an earlier trans-
fer, the GST exemption timely allocated
(whether affirmatively or automatically)
to a later transfer could be reduced or
eliminated. The commenter suggested that
the grant of relief for the earlier transfer
could be conditioned on payment of the
GST tax that may be due if the inclusion
ratio with respect to the subsequent trans-
fer is increased by the grant of relief. The
Treasury Department and the IRS believe
that, because the response to this comment
may go beyond the scope of the proposed
regulations, this issue is among those they
intend to address in subsequent guidance.
IX. Proposed §26.2642-7(f) -- Period of
Limitations Under Section 6501
Proposed §26.2642-7(f), redesignated
in the final regulations as §26.2642-7(g),

Bulletin No. 2024–22 1323 May 28, 2024
provides that a request for relief does not
reopen, suspend, or extend the period
of limitations on assessment or collec-
tion of any estate, gift, or GST tax under
section 6501 of the Code. Thus, the IRS
may request that the transferor or the
transferor’s executor consent under sec-
tion 6501(c)(4) to an extension of the
period of limitations on assessment or col-
lection of any or all gift and GST taxes.
A commenter requested that the refer-
ences to gift tax be removed from this pro-
vision, apparently in an effort to eliminate
the possibility that the grant of relief might
be conditioned on the taxpayer’s agreement
to extend the gift tax period of limitations.
The commenter’s rationale for this request
is that the request for relief relates only
to the GST tax. The references to gift tax
in this provision, however, complement
§26.2642-7(d)(3)(ii) of the final regula-
tions, in effect, by allowing the taxpayer
to avoid a finding of prejudice to the inter-
ests of the government by agreeing to an
extension of the gift tax period of limita-
tions. An agreement to extend the period
of limitations is voluntary and declining to
agree to an extension would not necessarily
mean that relief would be denied, but it is a
factor that may be taken into consideration.
By retaining this reference to the gift tax,
the government would be given adequate
time to consider the reported identity of the
transferor, the valuation of the transferred
interest that will eventually determine the
amount of GST exemption that may be
allocated to the transfer, or any other aspect
of the transfer that is relevant for Federal
gift or estate tax purposes. Therefore, this
reference has not been deleted from the
final regulations.
A taxpayer who seeks relief under sec-
tion 2642(g)(1) will not be regarded as
having filed a claim for refund or credit
merely by requesting such relief.
X. Proposed §26.2642-7(h)(2) and (3) --
Affidavits and Declarations
Commenters recommended against
requiring affidavits that provide more
information than is required under
§301.9100-3(e)(2) and (3). One com-
menter characterized the proposed pro-
cedural requirements as more burden-
some than the corresponding procedural
requirements under the section 9100
provisions and stated that these “more
burdensome” requirements for relief are
inconsistent with the statutory mandate
in section 2642(g). Since the enactment
of section 2642(g), the IRS has issued a
significant number of private letter rulings
granting relief under section 2642(g)(1).
After considering the circumstances in the
requests, the IRS has concluded that cer-
tain information in addition to that speci-
fied in §301.9100-3(e)(2) and (3) is neces-
sary to determine whether relief should be
granted. Accordingly, based on the IRS’s
experience in evaluating such requests for
relief, the Treasury Department and the
IRS have not adopted this recommenda-
tion in the final regulations.
Another commenter maintained that the
affidavits required by proposed §26.2642-
7(h) are not necessary for the proper per-
formance of the functions of the IRS and,
therefore, the quality, utility, and clarity
of the information to be provided by the
affidavits cannot be enhanced. In support,
the commenter argued that the affidavits
demand more substantiation from tax-
payers than is contemplated by section
2642(g)(1)(B). In addition, the commenter
asserted that the IRS can grant relief under
section 2642(g)(1) without requiring these
affidavits if the IRS focuses on the gov-
ernment’s interest and the transferor’s
intent as evidenced in the transfer docu-
ments and other supporting documents.
Finally, the commenter stated that the IRS
could determine from the documents pre-
viously filed with the IRS that the period
of limitations had expired or that a taxable
termination or distribution had occurred,
both factors that may be indicative of prej-
udice to the government.
In the course of issuing private letter
rulings under §301.9100-3, the IRS has
determined that, while transfer instru-
ments and other relevant documents pro-
vided by the transferor or the transferor’s
executor provide useful information, these
documents do not necessarily provide all
of the information needed to evaluate
properly a request for relief under section
2642(g)(1). Accordingly, the final regula-
tions retain the requirement that requests
for relief include detailed affidavits. How-
ever, after consideration of the comments
and review of the proposed regulations,
the Treasury Department and the IRS have
modified the regulations by decreasing the
amount of information required in affi-
davits in order to replicate more closely
the requirements of §301.9100-3(e)(2)
and (3). As a result, the final regulations
reduce the burden the proposed regula-
tions would have imposed.
Commenters also requested a narrow-
ing of the categories of individuals from
whom affidavits will be required. In addi-
tion to individuals involved in the prepara-
tion of the tax return, proposed §26.2642-
7(h)(3) also includes in this group each tax
professional who advised or was consulted
on “any aspect of the transfer” or on the
trust, and each agent or legal representa-
tive of the transferor who participated “in
the transaction.” Commenters noted that
this group may include advisors, agents,
or legal representatives of the transferor
who had nothing to do with preparing the
return or with the decision or failure to
allocate exemption or to make an election
on that return.
In response to these comments, the
Treasury Department and the IRS have
modified the regulations by narrowing the
categories of individuals required to sub-
mit affidavits under proposed §26.2642-
7(h)(3), redesignated in the final regula-
tions as §26.2642-7(i)(4). Specifically,
the final regulations do not include in this
group of required affiants any tax profes-
sional unless that professional participated
in or provided advice with regard to the
GST tax exemption allocation or election,
or with regard to the preparation of the
return. As a result, the final regulations
reduce the burden the proposed regula-
tions would have imposed.
The final regulations, however, also
have been modified to confirm that the
IRS, consistent with current procedures in
the IRS private letter ruling program, may
require affidavits and copies of writings
from persons not included in the more nar-
row group described in §26.2642-7(i)(4)
in cases in which the IRS believes addi-
tional information is required or would be
helpful in making the determination as to
whether relief under section 2642(g)(1)
will be granted.
XI. Proposed §26.2642-7(h)(3)(iii) –
Affidavits of Other Parties
Proposed §26.2642-7(h)(3)(iii) pro-
vides that a party making an affidavit must

May 28, 2024 1324 Bulletin No. 2024–22
attach to each affidavit copies of any writ-
ing (including, without limitation, notes
and e-mails) and other contemporaneous
documents within the possession of the
affiant relevant to the transferor’s intent
with regard to the application of GST tax
to the transaction. A commenter requested
that this provision be modified to pro-
vide that a lawyer or accountant is not
deemed to possess any documents that are
in the possession of his or her law firm or
accounting firm. In response to this com-
ment, this provision of the final regula-
tions, redesignated in the final regulations
as §26.2642-7(i)(4)(iii), clarifies that the
writings to be submitted under these regu-
lations are those that the affiant discovers
by conducting, in good faith, a reasonably
diligent search of records in the possession
of or accessible to the affiant, or subject to
the affiant’s control. A reasonably diligent
search generally would include, without
limitation, a review of the records in the
possession or control of the affiant or the
firm with which the affiant is employed
or associated relating to the transaction or
tax return at issue.
XII. Proposed §26.2642-7(h)(3)(v) –
Death or Incapacity
Proposed §26.2642-7(h)(3)(v) pro-
vides that, if a person who would be
required to provide an affidavit under pro-
posed §26.2642-7(h)(3)(i) has died or is
not competent, the transferor or the trans-
feror’s executor must include a statement
to that effect in the affidavit of that trans-
feror or executor.
A commenter suggested that this pro-
posed provision would require the trans-
feror or the transferor’s executor to deter-
mine the competency of a person and that
such a requirement would be inappropri-
ate. Further, the commenter noted that,
in addition to death and incompetence,
serious physical illness or other physical
impairment also could render a person
unable to provide an affidavit. The com-
menter recommended that this provision
be modified to provide that the transferor
or the transferor’s executor may satisfy
the requirements of this provision with a
statement that such transferor or executor,
despite his or her best efforts in good faith,
was unable to obtain the affidavit required
under proposed §26.2642-7(h)(3)(i) and
an explanation of the basis for the trans-
feror’s or executor’s conclusion, based on
his or her best knowledge and reasonable
belief that such affidavit was not obtain-
able.
The corresponding provision in the
final regulations (§26.2642-7(i)(4)(vi))
has been modified to apply to persons
who have died or who are unwilling or
unable to provide the required affidavit
at the time relief is requested. For pur-
poses of this provision, the term unwill-
ing refers to a person who does not (other
than one who is unable to) provide the
required affidavit, despite the best efforts
of the transferor or the transferor’s exec-
utor, made in good faith, to obtain the
required affidavit. The unwillingness of
certain persons to provide an affidavit,
however, may be considered by the IRS
in determining whether or not to grant
the requested relief. In addition, for pur-
poses of this provision, the term unable
refers to a permanent condition such
as physical or mental incapacity that
prevents a person from providing the
required affidavit, but not a temporary
condition such as a temporary physical
or mental incapacity or a person’s inabil-
ity due to a leave of absence, travel, or a
contractual requirement such as a confi-
dentiality agreement.
XIII. User Fee and Estimated Burden
A commenter noted that taxpayers
have to pay a user fee when seeking
relief under section 2642(g)(1) through
the IRS private letter ruling program.
The commenter proposed that, given the
complexity of the rules and the frequency
of changes to the rules, relief under sec-
tion 2642(g)(1) should be granted with-
out charging a user fee. The commenter
noted that, under other circumstances,
the IRS has developed simplified pro-
cedures that do not necessitate a private
letter ruling request and suggested that
the compliance burden would be eased
significantly if a simplified procedure to
administer relief under section 2642(g)
(1) were developed.
The Treasury Department and the IRS
believe that the most efficient way to
address these requests for relief contin-
ues to be through the IRS private letter
ruling program. The user fee is imposed
to recover the government’s full cost
for providing the service. The Treasury
Department and the IRS agree that the
compliance burden would be eased sig-
nificantly if it was possible to develop a
simplified procedure to administer relief
under section 2642(g)(1). For instance,
Rev. Proc. 2004-46 (2004-2 CB 142)
and Rev. Proc. 2004-47 (2004-2 CB 169)
identify situations in which the Treasury
Department and the IRS believe that
relief may be granted without adversely
affecting the interests of the government.
See §601.601(d)(2)(ii)(b). The Treasury
Department and the IRS are prepared to
issue additional revenue procedures or
other guidance when they identify situa-
tions for which simplified or automatic
relief under section 2642(g)(1) would be
appropriate and administrable. Until such
guidance is issued, however, the IRS pri-
vate letter ruling program will continue to
allow the IRS to obtain and evaluate the
information necessary to identify such
situations. The user fee would follow
the same schedule and amount as rulings
under §301.9100-1. See Appendix A of
Rev. Proc. 2024-1, 2024-1 I.R.B. 1, 85.
The IRS had estimated in the proposed
regulations that the annual burden to pre-
pare the affidavits was two hours. Many
commenters mentioned that the estimated
burden was drastically underestimated
due to the numerous requirements of the
proposed regulations. In response to these
comments, the IRS has reconsidered this
estimate of the annual burden and has
increased the estimated annual burden to
20 hours.
Effect on Other Documents
Notice 2001-50, 2001-2 CB 189, is
obsolete as of May 6, 2024.
Special Analyses
I. Regulatory Planning and Review
Pursuant to the Memorandum of
Agreement, Review of Treasury Regula-
tions under Executive Order 12866 (June
9, 2023), tax regulatory actions issued by
the IRS are not subject to the requirements
of section 6 of Executive Order 12866, as
amended. Therefore, a regulatory impact
assessment is not required.

Bulletin No. 2024–22 1325 May 28, 2024
II. Paperwork Reduction Act
In accordance with the Paperwork Reduc-
tion Act, 44 U.S.C. 3501 et seq. (PRA), infor-
mation collection requirements contained in
these final regulations are in §26.2642-7(i)(3)
and (4). These provisions require transferors
or the executors of transferors’ estates to pro-
vide one or more affidavits when requesting
relief under section 2642(g)(1) of the Internal
Revenue Code. The IRS will use the infor-
mation in the affidavits to determine whether
to grant a transferor or a transferor’s estate an
extension of time to (1) allocate GST exemp-
tion as defined in section 2631, (2) elect under
section 2632(b)(3) not to have the automatic
allocation of GST exemption apply to a direct
skip, (3) elect under section 2632(c)(5)(A)
(i) not to have the automatic allocation of
GST exemption apply to an indirect skip or
to transfers made to a particular trust, and (4)
elect under section 2632(c)(5)(A)(ii) to treat
any trust as a GST trust for purposes of sec-
tion 2632(c).
The reporting burden associated with
the information collection in the final
regulations are included in the aggregate
burden estimates for OMB control num-
ber 1545-2116. The estimated number of
respondents, who are mainly attorneys
representing the taxpayers, for each year is
estimated to be 50. The estimated burden
for each respondent to prepare the private
letter ruling request and the accompany-
ing affidavits is 20 hours per respondent.
Thus, the total annual burden is estimated
to be 1000 hours. It should be noted that
the burden is not an annual burden for
each taxpayer, as taxpayers do not need
to request a private letter ruling each year.
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
control number.
Books or records relating to a collec-
tion of information must be retained as
long as their contents might become mate-
rial in the administration of any Inter-
nal Revenue law. Generally, tax returns
and tax information are confidential, as
required by 26 U.S.C. 6103.
III. Regulatory Flexibility Act
It is hereby certified that these regula-
tions will not have a significant economic
impact on a substantial number of small
entities. The applicability of these regu-
lations is limited to individuals (or their
estates) and trusts, which are not small
entities as defined by the Regulatory Flex-
ibility Act (5 U.S.C. 601). Although it is
anticipated that there may be a beneficial
economic impact for some small entities,
including entities that provide tax and
legal services that assist individuals in
the IRS private letter ruling program, any
benefit to those entities would be indirect.
Further, this indirect benefit will not affect
a substantial number of these small enti-
ties because only a limited number of indi-
viduals (or their estates) and trusts would
submit a private letter ruling request under
this rule. Therefore, only a small fraction
of tax and legal services entities would
generate business or benefit from this rule.
Accordingly, a regulatory flexibility anal-
ysis is not required.
Pursuant to section 7805(f) of the Inter-
nal Revenue Code, the notice of proposed
rulemaking preceding these regulations
was submitted to the Chief Counsel for
Advocacy of the Small Business Adminis-
tration for comment on its impact on small
business and no comments were received
in response.
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 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.
V. Executive Order 13132: Federalism
Executive Order 13132 (entitled
“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 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. These proposed reg-
ulations do not have federalism implica-
tions and do not impose substantial direct
compliance costs on State and local gov-
ernments or preempt State law within the
meaning of the Executive order.
Drafting Information
The principal author of these regula-
tions is Mayer R. Samuels, Office of the
Associate Chief Counsel (Passthroughs
and Special Industries), IRS. However,
other personnel from the Treasury Depart-
ment and the IRS participated in their
development.
List of Subjects
26 CFR Part 26
Estate 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.
26 CFR Part 602
Reporting and recordkeeping require-
ments.
Adoption of Amendments to the
Regulations
Accordingly, the Treasury Department
and the IRS amend 26 CFR parts 26, 301,
and 602 as follows:
PART 26--GENERATION-SKIPPING
TRANSFER TAX REGULATIONS
UNDER THE TAX REFORM ACT OF
1986
Paragraph 1. The authority citation
for part 26 is amended by adding an entry
for §26.2642-7 in numerical order to read
in part as follows:
Authority: 26 U. S. C. 7805 * * *
* * * * *

May 28, 2024 1326 Bulletin No. 2024–22
Section 26.2642-7 also issued under 26
U.S.C. 2642(g).
* * * * *
Par. 2. Section 26.2642-7 is added to
read as follows:
§26.2642-7 Relief under section 2642(g)
(1).
(a) In general. Under section 2642(g)
(1)(A) of the Internal Revenue Code
(Code), the Secretary of the Treasury or
her delegate (Secretary) has the authority
to issue regulations describing the circum-
stances in which a transferor, as defined in
section 2652(a) of the Code, or the exec-
utor of a transferor’s estate, as defined in
section 2203 of the Code, will be granted
an extension of time to allocate genera-
tion-skipping transfer (GST) exemption
as described in section 2642(b)(1) and
(2). The Secretary also has the authority
to issue regulations describing the circum-
stances under which a transferor or the
executor of a transferor’s estate will be
granted an extension of time to make the
elections described in section 2632(b)(3)
and (c)(5) of the Code. Section 2632(b)(3)
provides that an election may be made by
or on behalf of a transferor not to have the
transferor’s GST exemption automatically
allocated under section 2632(b)(1) to a
direct skip, as defined in section 2612(c),
made by the transferor during life. Section
2632(c)(5)(A)(i) provides that an election
may be made by or on behalf of a trans-
feror not to have the transferor’s GST
exemption automatically allocated under
section 2632(c)(1) to an indirect skip, as
defined in section 2632(c)(3)(A), or to any
or all transfers made by such transferor to
a particular trust. Section 2632(c)(5)(A)
(ii) provides that an election may be made
by or on behalf of a transferor to treat any
trust as a GST trust, as defined in section
2632(c)(3)(B), for purposes of section
2632(c) with respect to any or all transfers
made by that transferor to the trust. This
section generally describes the factors
that the Internal Revenue Service (IRS)
will consider when an extension of time
is sought by or on behalf of a transferor to
timely allocate GST exemption or to make
an election under section 2632(b)(3) or (c)
(5). If the time period for an automatic
six-month extension under paragraph (i)
(1) of this section has passed, relief pro-
vided under this section can be requested
through the IRS private letter ruling pro-
gram. See paragraph (i) of this section.
(b) Effect of relief—(1) In general. If an
extension of time to allocate GST exemp-
tion is granted under this section, the allo-
cation of GST exemption, once made, will
be considered effective as of the date of
the transfer. Further, the amount of the
transferor’s GST exemption required to
be allocated in order to produce a zero
inclusion ratio solely with regard to that
transfer will be the value of the property
transferred for purposes of chapter 11 or
chapter 12 of the Code as of the date of
the transfer. If an extension of time to elect
out of the automatic allocation of GST
exemption under section 2632(b)(3) or (c)
(5)(A)(i) is granted under this section, the
election, once made, will be considered
effective as of the date of and immedi-
ately prior to the transfer. If an extension
of time to elect to treat any trust as a GST
trust under section 2632(c)(5)(A)(ii) is
granted under this section, the election,
once made, will be considered effective
as of the date of and immediately prior to
the first (or each) transfer covered by that
election. See paragraph (h) of this section
with regard to preserving a taxpayer’s eli-
gibility for a refund generated by a grant
of relief, if applicable.
(2) [Reserved]
(3) Effect on other transfers. Except as
otherwise provided in paragraph (e)(2)(ii)
of this section, an allocation of exemption
or an election made pursuant to a grant of
relief under this section does not reduce
or eliminate any affirmative allocation or
void any election made with respect to
any other transfer occurring contempora-
neously with or subsequent to the trans-
fer or transfers for which relief has been
granted.
(c) Limitation on relief. The amount
of GST exemption that may be allocated
to a transfer as the result of relief granted
under this section in no event may exceed
the amount of the transferor’s unused GST
exemption under section 2631(c) of the
Code as of the date of the transfer. Thus, if,
by the time of the making of the allocation
or election pursuant to relief granted under
this section, the GST exemption amount
under section 2631(c) has increased to an
amount in excess of the amount in effect
for the date of the transfer, no portion of
the increased amount may be applied to
that earlier transfer by reason of the relief
granted under this section.
(d) Basis for determination—(1) In
general. Requests for relief under this
section will be granted when and to the
extent that the transferor or the executor
of the transferor’s estate provides evi-
dence (including the affidavits described
in paragraph (i) of this section) establish-
ing to the satisfaction of the IRS that the
transferor or the executor of the transfer-
or’s estate acted reasonably and in good
faith, and that the grant of relief will not
prejudice the interests of the government.
Paragraphs (d)(2) and (3) of this section
set forth nonexclusive lists of factors the
IRS will consider in determining whether
this standard of reasonableness, good
faith, and lack of prejudice to the inter-
ests of the government has been met so
that such relief will be granted. In making
this determination, the IRS will consider
those factors set forth in paragraphs (d)(2)
and (3) of this section, as well as all other
facts and circumstances not specifically
set forth herein that are relevant to the
particular situation. Paragraph (e) of this
section sets forth some situations in which
this standard is not met and, as a result, in
which relief under this section will not be
granted.
(2) Reasonableness and good faith.
The following is a nonexclusive list of
factors that will be considered in deter-
mining whether the transferor or the exec-
utor of the transferor’s estate acted rea-
sonably and in good faith for purposes of
this section. Not all of these factors may
be relevant in a particular situation (and
those that are not relevant are not required
to be addressed in the request for relief
made in accordance with paragraph (i) of
this section). Further, it is possible that the
evidence relating to any one of these fac-
tors, in the context of all of the facts and
circumstances of the particular situation,
may be sufficient to persuade the IRS that
the grant of relief under section 2642(g)
(1) would be appropriate. However, as
a general rule, no single factor (whether
listed or not) will be determinative in all
cases. The factors are as follows:
(i) Intent. The intent of the transferor to
timely allocate GST exemption to a trans-
fer or to timely make an election under
section 2632(b)(3) or (c)(5), as evidenced

Bulletin No. 2024–22 1327 May 28, 2024
in the trust instrument, the instrument
of transfer, or other relevant documents
contemporaneous with the transfer, such
as Federal gift and estate tax returns and
correspondence. This may include evi-
dence of the intended GST tax status of the
transfer or the trust (for example, exempt,
non-exempt, or partially exempt), or more
explicit evidence of intent with regard to
the allocation of GST exemption or the
election under section 2632(b)(3) or (c)(5).
(ii) Intervening events. Intervening
events beyond the control of the transferor
or of the executor of the transferor’s estate
that caused the failure to allocate GST
exemption to a transfer or the failure to
make an election under section 2632(b)(3)
or (c)(5).
(iii) Lack of awareness. Lack of aware-
ness, despite the exercise of reasonable
diligence, by the transferor or the execu-
tor of the transferor’s estate of the need
to allocate GST exemption to the transfer,
taking into account the experience of the
transferor or the executor of the transfer-
or’s estate and the complexity of the GST
tax issue, as the cause of the failure to
allocate GST exemption to a transfer or to
make an election under section 2632(b)(3)
or (c)(5).
(iv) Consistency. Consistency by the
transferor with regard to the allocation
of the transferor’s GST exemption to one
or more trusts or skip persons. For exam-
ple, the transferor’s consistent pattern of
allocation of GST exemption to trans-
fers (whether or not made in consecutive
years) to skip persons or to a particular
trust, or the transferor’s consistent pattern
of electing not to have the automatic allo-
cation of GST exemption apply to trans-
fers (whether or not made in consecutive
years), will be taken into consideration.
Evidence of consistency may be less rele-
vant if there has been a change of circum-
stances or a change of trust beneficiaries
that otherwise would explain a deviation
from prior GST exemption allocation
decisions. Relief under this section will
not be denied merely because a pattern
of allocation or election does not exist
or because the existing pattern changed
at some point, whether in response to the
enactment of section 2642(g) or to some
other factor unrelated to either a lack of
reasonableness or good faith or prejudice
to the interests of the government.
(v) Qualified tax professional. Reason-
able reliance by the transferor or the exec-
utor of the transferor’s estate on the advice
of a qualified tax professional retained or
employed by one or both of them and
either the failure of the tax professional,
or, in reliance on or consistent with (or
in the absence of) that tax professional’s
advice, the failure of the transferor or the
executor, to allocate GST exemption to the
transfer or to make an election described
in section 2632(b)(3) or (c)(5). Reliance
on a qualified tax professional will not be
considered to have been reasonable if the
transferor or the executor of the transfer-
or’s estate knew or should have known
that the professional either--
(A) Was not competent to render advice
on the GST exemption; or
(B) Was not aware of all relevant facts.
(3) Prejudice to the interests of the
government. The following is a nonexclu-
sive list of factors that will be considered
to determine whether the interests of the
government would be prejudiced for pur-
poses of this section:
(i) Hindsight. An attempt to benefit
from hindsight will be deemed to preju-
dice the interests of the government. A
factor relevant to this determination is
whether the grant of the requested relief
would permit an economic advantage or
other benefit that would not have been
available if the allocation or election had
been timely made. For example, there may
be prejudice if a grant of the requested
relief would permit an economic advan-
tage or other benefit that results from the
selection of one out of a number of alter-
natives (other than whether or not to make
an allocation or election) that were avail-
able at the time the allocation or election
could have been timely made, if hindsight
makes the selected alternative more bene-
ficial than the other alternatives. Prejudice
also would exist if the transferor failed to
make the allocation or election in order
to wait to see (thus, with the benefit of
hindsight) whether making an allocation
of exemption or election would be more
beneficial than not making the allocation
or election. For instance, assume that a
transferor funds several trusts with dif-
ferent property interests on the same date,
and does not allocate GST exemption to
any trust. Several years later, the trans-
feror seeks relief to allocate GST exemp-
tion to the trust that enjoyed the greatest
asset appreciation and thus constitutes
the most effective use of the transferor’s
GST exemption. Relief will not be granted
because the transferor attempted to bene-
fit from hindsight and thereby acquire an
economic advantage.
(ii) Timing of the request for relief. The
timing of the request for relief will be con-
sidered in determining whether the inter-
ests of the government would be preju-
diced by granting relief under this section.
The interests of the government would
be prejudiced if delay by the transferor
or the executor of the transferor’s estate
in the filing of the request for relief was
intended to deprive the IRS of a sufficient
period of time in which to challenge any
element of the transfer that is the subject
of the request for relief, such as the value
of the transferred property for Federal gift
or estate tax purposes, the claimed identity
of the transferor of the transferred prop-
erty, or any other aspect of the transfer
that is relevant for Federal gift or estate
tax purposes. For this purpose, such intent
will be presumed, but may be rebutted
by evidence persuasive to the IRS of the
existence of other reasons for or circum-
stances causing the delay.
(iii) Intervening taxable events. The
occurrence and effect of an intervening
taxable termination or taxable distribution
will be considered in determining whether
and to what extent the interests of the gov-
ernment would be prejudiced by a grant
of relief under this section. The interests
of the government may be prejudiced if a
taxable termination or a taxable distribu-
tion occurred between the time for mak-
ing a timely allocation of GST exemption
or a timely election described in section
2632(b)(3) or (c)(5) and the time at which
the request for relief under this section
was filed. The impact of a grant of relief
on (and the difficulty of adjusting) the
GST tax consequences of that intervening
termination or distribution will be consid-
ered in determining whether the occur-
rence of a taxable termination or taxable
distribution constitutes prejudice.
(iv) Closed years. Subject to the con-
siderations described in paragraph (d)(3)
(ii) of this section, the expiration of any
period of limitations on the assessment
or collection of transfer taxes prior to the
filing of a request for relief under this sec-

May 28, 2024 1328 Bulletin No. 2024–22
tion generally is not relevant to the deter-
mination of whether the requirements for a
grant of relief under this section have been
met. If that period has expired, however,
and if the IRS concludes that the value of
the transferred asset or assets as reported
on a Federal gift or estate tax return by the
transferor or the executor of the transfer-
or’s estate is likely to have satisfied the
definition of a gross valuation misstate-
ment as defined in section 6662(h)(2)(C)
of the Code, the IRS will consider the
purported undervaluation in determining
whether a grant of relief will prejudice the
interests of the government.
(e) Situations in which the standard
of reasonableness, good faith, and lack
of prejudice to the interests of the gov-
ernment has not been met—(1) In gen-
eral. Relief under this section will not
be granted if the IRS determines that the
transferor or the executor of the transfer-
or’s estate has not acted reasonably and in
good faith, or that the grant of relief would
prejudice the interests of the government.
The following situations illustrate some
circumstances in which the standard of
reasonableness, good faith, and lack of
prejudice to the interests of the govern-
ment has not been met, and as a result, in
which relief under this section will not be
granted.
(2) Affirmative allocations—(i) In gen-
eral, relief will not be granted under this
section to the extent that it would decrease
or revoke an affirmative (but not automatic)
allocation of GST exemption under section
2632(a) or 2642(b) that was made on a
Federal gift or estate tax return, regardless
of whether the transfer or the allocation of
exemption was made during the transfer-
or’s life or upon the transferor’s death.
(ii) There are three exceptions to this
general rule, as follows. No request for
relief is required for either of the first two
exceptions:
(A) An allocation of GST exemption
is void to the extent the amount allocated
exceeds the amount necessary to obtain
an inclusion ratio of zero with respect to
the property transferred or to the trust.
This provision does not apply to charita-
ble lead annuity trusts, nor does it apply
to an allocation made to a trust subject to
an estate tax inclusion period before the
termination of that period. See §26.2632-
1(b)(4)(i).
(B) An allocation is void if the alloca-
tion is made with respect to a trust that,
at the time of the allocation, has no GST
potential with respect to the transferor
making the allocation. For this purpose, a
trust has GST potential even if the possi-
bility of a GST is so remote as to be negli-
gible. See §26.2632-1(b)(4)(i).
(C) A late allocation of GST exemp-
tion, as described in section 2642(b)(3), to
a transfer or to a trust will be deemed void
upon the grant of relief under this section
if--
(1) Prior to December 31, 2000, a
transfer is made that is subject to GST tax
or to a trust that has GST potential with
respect to the transferor;
(2) A timely allocation of GST exemp-
tion was not made to the transfer or the
trust, and this missed allocation was not
eligible for relief prior to the enactment of
section 2642(g)(1);
(3) Prior to December 31, 2000, a late
allocation of GST exemption was made to
the transfer or the trust;
(4) The late allocation is disclosed as
part of the request for relief or during the
IRS’s consideration of that request; and
(5) Relief under this section is granted
to make a timely allocation to the transfer
or the trust described in paragraph (e)(2)
(ii)(C)(1) of this section.
(3) Timing. Relief will not be granted
with regard to a transfer reported on the
transferor’s gift tax return in the situation
in which the transferor filed the request
for relief shortly after the expiration of
the period during which an assessment of
gift tax could be made with respect to that
transfer, the IRS reasonably concludes
that the transferor intentionally delayed
that filing for the purpose of preventing an
IRS examination of the reported value of
the property subject to that transfer or the
claimed identity of the transferor or other
fact relevant for transfer tax purposes, and
the transferor is unable to produce evi-
dence sufficient to convince the IRS that
the filing delay was attributable to some
other reason or purpose.
(4) Failure after being accurately
informed. Relief will not be granted
under this section if the decision made
by the transferor or the executor of the
transferor’s estate (who had been accu-
rately informed in all material respects
by a qualified tax professional retained or
employed by either (or both) of them with
regard to the allocation of GST exemption
or an election described in section 2632(b)
(3) or (c)(5)) was reflected or implemented
by the action or inaction that is the subject
of the request for relief.
(5) Hindsight. Relief under this section
will not be granted if the IRS determines
that the requested relief is an attempt to
benefit from hindsight by waiting to see
which of multiple transfers, made at sub-
stantially the same time but consisting of
different property interests, enjoyed the
greatest appreciation and thus would con-
stitute the most effective use of the trans-
feror’s GST exemption.
(f) [Reserved]
(g) Period of limitations under section
6501. A request for relief under this sec-
tion does not reopen, suspend, or extend
the period of limitations on assessment
or collection of any estate, gift, or GST
tax under section 6501 of the Code. The
IRS may request that the transferor or
the transferor’s executor consent, under
section 6501(c)(4) and prior to the expi-
ration of that period of limitations, to an
extension of the period of limitations on
assessment or collection of any or all gift
and GST taxes for the transfer or trans-
fers that are the subject of the requested
relief. The transferor or the transferor’s
executor has the right to refuse to extend
the period of limitations, or to limit any
such extension to particular issues or to
a particular period of time. See section
6501(c)(4)(B). Because a consent to an
extension (whether or not limited) may
eliminate prejudice to the interests of the
government described in paragraphs (d)
(3)(ii) and (e)(3) of this section, a refusal
to consent to an extension is a factor that
may adversely impact the availability of
the requested relief.
(h) Refunds. The filing of a request
for relief under section 2642(g)(1) with
the IRS does not constitute a claim for
refund or credit of an overpayment and
no implied right to refund will arise from
the filing of such a request for relief. Sim-
ilarly, the filing of such a request for relief
does not extend the period of limitations
under section 6511 of the Code for filing
a claim for refund or credit of an over-
payment. If the grant of relief under sec-
tion 2642(g)(1) results in the decrease of
a trust’s inclusion ratio or a reduction in

Bulletin No. 2024–22 1329 May 28, 2024
the amount of a direct skip, and thus in a
potential claim for refund or credit of an
overpayment of tax, no such refund or
credit will be allowed to the taxpayer or
to the taxpayer’s estate if the period of
limitations under section 6511 for filing a
claim for a refund or credit of the Federal
gift, estate, or GST tax that was reduced
by the granted relief has expired, unless a
claim for refund or credit was filed before
the expiration of that period. The taxpayer
or the taxpayer’s estate is responsible for
preserving any potential claim for refund
or credit.
(i) Procedural requirements—(1) Auto-
matic 6-month extension. An automatic
extension of 6 months from the due date of
the gift or estate tax return, or of the Form
8939, Allocation of Increase in Basis for
Property Acquired From a Decedent, of a
decedent dying in calendar year 2010, (in
each case, excluding extensions) is granted
to file a supplemental return or Form 8939
on which the transferor or the executor of
the transferor’s estate may allocate GST
exemption or make an election under sec-
tion 2632(b)(3) or (c)(5). This extension,
however, is available only if the transferor
(or the executor of a transferor’s estate)
both timely filed the gift or estate tax
return or the Form 8939 on which the GST
exemption should have been allocated or
the election should have been made, and,
within that 6-month extension period, files
a supplemental return or other supplemen-
tary filing. On the supplemental return or
other filing, the taxpayer must comply
with all of the requirements for allocating
GST exemption under section 2632 or for
making the election under section 2632(b)
(3) or (c)(5) for the year the allocation or
election should have been made to make
a valid allocation or election. Any supple-
mental return filed pursuant to this para-
graph must say FILED PURSUANT TO
§26.2642-7(i)(1) on the front page of the
return or the Form 8939, and must be sent
to the same address that a timely return
or Form 8939 on which the allocation or
election should have been made would
have been sent, subject to address changes
in future forms or instructions or guid-
ance published in the Internal Revenue
Bulletin. See §601.601(d)(2) of this chap-
ter. No request for a private letter ruling
is required and, as a result, no user fee is
required to be paid.
(2) Private letter ruling program.
Except for the automatic 6-month exten-
sion provided in paragraph (i)(1) of this
section, the relief described in this sec-
tion is provided through the IRS’s private
letter ruling program. Requests for relief
may be submitted in accordance with the
applicable procedures for requests for a
private letter ruling.
(3) Affidavit and declaration of trans-
feror or the executor of the transferor’s
estate. (i) The transferor or the executor
of the transferor’s estate must submit a
detailed affidavit describing the events
that led to the failure to timely allocate
GST exemption to a transfer or the fail-
ure to timely elect under section 2632(b)
(3) or (c)(5), and the events that led to
the discovery of the failure. In situa-
tions described in paragraph (i)(4)(vi)
of this section, this affidavit also must
include the additional information and
statements described in that paragraph.
If the transferor or the executor of the
transferor’s estate relied on a tax pro-
fessional for advice with respect to the
allocation or election, the affidavit also
must describe--
(A) The scope of the engagement;
(B) The responsibilities the transferor
or the executor of the transferor’s estate
believed the professional had assumed;
and
(C) The extent to which the transferor
or the executor of the transferor’s estate
relied on the professional.
(ii) Attached to each affidavit must be
copies of any writings (including, without
limitation, notes and e-mails) and other
contemporaneous documents within the
possession or control of the affiant rele-
vant to the determination of the transfer-
or’s intent with regard to the application
of GST tax to the transaction for which
relief under this section is requested.
(iii) The affidavit must be accompa-
nied by a dated declaration, signed by the
transferor or the executor of the transfer-
or’s estate, that states:
Under penalties of perjury, I declare
that I have examined this affidavit, includ-
ing any attachments thereto, and to the
best of my knowledge and belief, this affi-
davit, including any attachments thereto,
is true, correct, and complete. In addition,
under penalties of perjury, I declare that I
have examined all the documents included
as part of this request for relief, and that,
to the best of my knowledge and belief,
these documents collectively contain all
the relevant facts relating to the request
for relief and such facts are true, correct,
and complete.
(4) Affidavits and declarations from
other parties. (i) The transferor or the
executor of the transferor’s estate must
submit detailed affidavits from the indi-
viduals specified in paragraphs (i)(4)(i)
(A) through (D) of this section and other
individuals who have knowledge or infor-
mation about the events that led to the fail-
ure to allocate GST exemption or to elect
under section 2632(b)(3) or (c)(5), or to
the discovery of the failure. These indi-
viduals may include individuals whose
knowledge or information is not within
the personal knowledge of the transferor
or the executor of the transferor’s estate.
The individuals described in this para-
graph must include--
(A) Each agent or legal representa-
tive of the transferor who participated in
the consideration of, or the decision with
regard to, the allocation of GST exemption
or the election under section 2632(b)(3) or
(c)(5), or the preparation of the return for
which relief is being requested;
(B) The preparer of the relevant Fed-
eral estate or gift tax return or returns;
(C) Each individual (including an
employee of the transferor or of the
executor of the transferor’s estate) who
provided information or advice with
regard to, or otherwise made a signifi-
cant contribution to, the decision con-
cerning the allocation of GST exemp-
tion, the election under section 2632(b)
(3) or (c)(5), or the preparation of the
relevant Federal estate and/or gift tax
return or returns; and
(D) Each tax professional who advised
or was consulted by the transferor or the
executor of the transferor’s estate with
regard to the allocation of GST exemp-
tion, the election under section 2632(b)
(3) or (c)(5), or the preparation of the rel-
evant Federal estate or gift tax return or
returns.
(ii) Each affidavit must describe the
scope of the engagement and the respon-
sibilities of the individual as well as the
advice or service the individual provided
to the transferor or the executor of the
transferor’s estate.

May 28, 2024 1330 Bulletin No. 2024–22
(iii) Attached to each affidavit must be
a copy of each writing (including, without
limitation, notes and e-mails) and other
contemporaneous documents within the
possession of the affiant relevant to the
transferor’s intent or the affiant’s advice
with regard to the application of GST tax
to the transaction for which relief under
this section is requested. The documents
that the affiant discovers by conducting
in good faith a reasonably diligent search
of records in the possession of or acces-
sible to the affiant, or subject to the affi-
ant’s control, will be sufficient to satisfy
the requirements of this paragraph (i)(4)
(iii). A reasonably diligent search gener-
ally would include, without limitation, a
review of the records in the possession or
control of the affiant or the firm at which
the affiant is employed or associated relat-
ing to the transaction or tax return at issue.
(iv) The IRS may require additional
affidavits from persons not set forth in
paragraph (i)(4)(i) of this section as well
as additional documents when additional
information or documents with respect
to a transfer is believed by the IRS to be
required or helpful in making its determi-
nation as to whether relief under this sec-
tion should be granted.
(v) Each affidavit also must include the
name and current address of the affiant,
and must be accompanied by a dated dec-
laration signed by the affiant that states:
Under penalties of perjury, I declare
that I have personal knowledge of the
information set forth in this affidavit,
including any attachments thereto. In
addition, under penalties of perjury,
I declare that I have examined this
affidavit, including any attachments
thereto, and, to the best of my knowl-
edge and belief, the affidavit contains
all the relevant facts and the attach-
ments include copies of all relevant
writings or other documents result-
ing from a reasonably diligent search,
conducted in good faith, of all records
within my possession, accessible to
me, or subject to my control, relating
to the allocation of GST exemption,
the election under section 2632(b)(3)
or (c)(5), and the preparation of the tax
return at issue in the request for relief
filed by or on behalf of [transferor or
executor of transferor’s estate], and
such facts and attached documents are
true, correct, and complete.
(vi) If an individual who would be
required to provide an affidavit under
paragraph (i)(4)(i) of this section has
died or is unwilling or otherwise unable
to provide the required affidavit, the affi-
davit required under paragraph (i)(3) of
this section must include a statement to
that effect, as well as a statement describ-
ing the relationship between that individ-
ual and the transferor or the executor of
the transferor’s estate; the information or
knowledge the transferor or the executor
of the transferor’s estate believes that
individual had about the events that led
to the failure to make the allocation or
the election or to the discovery of that
failure; and, in cases other than the death
of the individual, a detailed description
of the efforts made to obtain the affidavit
from the individual. The unwillingness
of certain affiants to provide an affida-
vit, however, may be considered by the
IRS in determining whether to grant the
requested relief. For purposes of this
paragraph (i)(4)(vi), the term unwilling
refers to a person who is apparently able
but refuses or otherwise fails, despite
the best efforts, made in good faith, of
the transferor or the transferor’s execu-
tor, to provide the required affidavit. In
addition, for purposes of this paragraph,
the term unable refers to a permanent
or potentially long-term condition such
as physical or mental incapacity that
prevents the person from providing the
required affidavit, but not a temporary
condition such as a temporary physical
or mental incapacity or a person’s inabil-
ity due to a leave of absence, travel, or a
contractual requirement such as a confi-
dentiality agreement.
(5) Additional rules regarding relief.
For purposes of relief under paragraphs
(i)(1) and (2) of this section, the grant of
relief in the form of an extension of time
is not a determination that the taxpayer is
otherwise eligible to make the election. In
addition, notwithstanding the provisions
of this section, an extension of time will
not be granted under this section if alter-
native relief is provided by a statute, a
regulation published in the Federal Reg-
ister, or a revenue ruling, revenue proce-
dure, notice, or announcement published
in the Internal Revenue Bulletin (see
§601.601(d)(2) of this chapter).
(j) Applicability date. This section
applies to requests for relief to which sec-
tion 2642(g)(1) applies that are filed on or
after May 6, 2024, regardless of the date
of the transfer.
PART 301--PROCEDURE AND
ADMINISTRATION
Par. 3. The authority citation for part
301 continues to read in part as follows:
Authority: 26 U.S.C. 7805.
Par. 4. Section 301.9100-2 is amended
by adding paragraph (f) to read as follows:
§301.9100-2 Automatic extensions.
* * * * *
(f) Automatic 6-month extension for
certain generation-skipping transfer tax
allocations and elections—(1) Availabil-
ity. Paragraph (b) of this section is not
available to obtain an automatic 6-month
extension to allocate generation-skipping
transfer (GST) exemption to a transfer
pursuant to section 2632 or to make an
election under section 2632(b)(3) or (c)
(5). An automatic 6-month extension to
allocate GST exemption under section
2632 or to make an election under sec-
tion 2632(b)(3) or (c)(5) is available to
transferors or the executors of transfer-
ors’ estates pursuant to §26.2642-7(i)(1)
of this chapter if the requirements of that
provision are satisfied.
(2) Applicability date. Paragraph (f) of
this section applies to any gift or estate
tax return or Form 8939, Allocation of
Increase in Basis for Property Acquired
from a Decedent, for which the date pre-
scribed for filing is on or after May 6,
2024 (excluding extensions), regardless
of the date of the transfer.
Par. 5. Section 301.9100-3 is amended
by adding paragraph (g) to read as fol-
lows:
§301.9100-3 Other extensions.
* * * * *
(g) Relief under section 2642(g)(1)—
(1) Procedures. The procedures set forth in

Bulletin No. 2024–22 1331 May 28, 2024
this section are not applicable for requests
for relief under section 2642(g)(1). For
requests for relief under section 2642(g)
(1), see §26.2642-7 of this chapter.
(2) Applicability date. This paragraph
(g) applies to requests for relief to which
section 2642(g)(1) applies that are filed
on or after May 6, 2024, regardless of the
date of the transfer.
PART 602--OMB CONTROL
NUMBERS UNDER THE
PAPERWORK REDUCTION ACT
Par. 6. The authority citation for part
602 continues to read as follows:
Authority: 26 U.S.C. 7805.
Par. 7. In § 602.101, amend the table
in paragraph (b) by adding an entry in
numerical order for Ҥ26.2642-7(i)(3) and
(4)” to read as follows:
§602.101 OMB Control numbers.
* * * * *
(b) * * *
CFR part or section where identified and described Current OMB control No.
*******
26.2642-7(i)(3) and (4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1545-2116
*******
Douglas W. O’Donnell
Deputy Commissioner.
Approved: March 12, 2024
Aviva R. Aron-Dine
Acting Assistant Secretary of
the Treasury (Tax Policy).
(Filed by the Office of the Federal Register May 3,
2024, 8:45 a.m., and published in the issue of the
Federal Register for May 6, 2024, 89 FR 37116)

May 28, 2024 1332 Bulletin No. 2024–22
Part III
26 CFR 1.501(c)(3)-1:

Organizations organized and
operated for religious, charitable, scientific, testing
for public safety, literary, or educational purposes,
or for the prevention of cruelty to children or ani-
mals.
Rev. Proc. 2024-22
SECTION 1. PURPOSE
This revenue procedure obsoletes Rev.
Proc. 82-2, 1982-1 C.B. 367, which iden-
tified the State laws and circumstances
that the Internal Revenue Service (IRS)
previously concluded would permit an
organization to satisfy the requirements of
§ 1.501(c)(3)-1(b)(4) of the Income Tax
Regulations.
1
Many of the State laws iden-
tified in Rev. Proc. 82-2 have materially
changed, and a revenue procedure cannot
be relied upon to the extent it is predi-
cated on State law and that State law has
materially changed. See Rev. Proc. 89-14,
1989-1 C.B. 814.
SECTION 2. BACKGROUND
.01 To be organized exclusively for
one or more exempt purposes described in
§ 501(c)(3), an organization’s assets must
be dedicated to an exempt purpose. See
§ 1.501(c)(3)-1(b)(4).
.02 Section 1.501(c)(3)-1(b)(4) pro-
vides, in part, that:
An organization’s assets will be consid-
ered dedicated to an exempt purpose, for
example, if, upon dissolution, such assets
would, by reason of a provision in the
organization’s articles or by operation of
law, be distributed for one or more exempt
purposes, or to the Federal Government,
or to a State or local government, for a
public purpose, or would be distributed
by a court to another organization to be
used in such manner as in the judgment of
the court will best accomplish the general
purposes for which the dissolved organi-
zation was organized. However, an orga-
nization does not meet the organizational
test if its articles or the law of the State in
which it was created provide that its assets
would, upon dissolution, be distributed to
its members or shareholders.
.03 Section 1.501(c)(3)-1(b)(2) states
that, for purposes of that section, the term
“articles of organization” or “articles” (col-
lectively, Articles) includes “the trust instru-
ment, the corporate charter, the articles of
association, or any other written instrument
by which an organization is created.”
.04 Accordingly, to be treated as
described in § 501(c)(3), an organiza-
tion must satisfy the requirements of
§ 1.501(c)(3)-1(b)(4) by including an ade-
quate dissolution provision in its Articles
or, in the absence of such a provision, by
operation of State law. An organization
created in a State the laws of which sat-
isfy the distribution of assets on dissolu-
tion requirements of § 1.501(c)(3)-1(b)(4)
does not need to include an express disso-
lution provision in its Articles.
.05 Rev. Proc. 82-2 identified the
States and circumstances in which an
organization could satisfy the distribution
of assets upon dissolution requirements
of § 1.501(c)(3)-1(b)(4) by operation of
State law. The conclusions in Rev. Proc.
82-2 were based on State laws in effect at
the time of its publication. Rev. Proc. 82-2
also provided a sample of an acceptable
dissolution provision for organizations
that are required to include in their Arti-
cles an express provision for the distribu-
tion of assets upon dissolution.
.06 Section 7.01(5) of Rev. Proc. 89-14
cautions taxpayers, IRS personnel, and
others concerned to determine whether a
revenue procedure on which they seek to
rely has been revoked, modified, declared
obsolete, distinguished, clarified, or oth-
erwise affected by subsequent legislation,
treaties, regulations, revenue rulings, rev-
enue procedures, or court decisions. Sec-
tion 7.01(6) of Rev. Proc. 89-14 provides
that if the conclusion of a revenue proce-
dure is predicated upon a certain provision
or interpretation of law other than Federal
tax law, taxpayers, IRS personnel, and
others generally must determine whether
such relevant non-Federal tax law has
changed materially from that used in the
revenue procedure on which they seek to
rely. Therefore, under section 7.01(5) and
(6) of Rev. Proc. 89-14, a revenue proce-
dure cannot be relied upon to the extent
that it is predicated on State law and that
State law has materially changed.
.07 Many of the State laws consid-
ered in Rev. Proc. 82-2 have since been
amended, repealed, or replaced. Rev. Proc.
82-2 therefore no longer provides an accu-
rate list of the jurisdictions with laws that
operate to ensure the distribution of assets
for exempt purposes upon dissolution of
an organization for purposes of satisfying
§ 1.501(c)(3)-1(b)(4). Accordingly, this
revenue procedure is being published to
obsolete Rev. Proc. 82-2.
.08 An organization is responsible for
verifying whether the requirements of
§ 1.501(c)(3)-1(b)(4) are satisfied by appli-
cable State law if its Articles do not provide
for the distribution of its assets upon dis-
solution. An organization can ensure that it
satisfies the requirements of § 1.501(c)(3)-
1(b)(4) by including an acceptable disso-
lution provision in its Articles. Publication
557, Tax-Exempt Status for Your Organiza-
tion (currently available at: https://www.irs.
gov/pub/irs-pdf/p557.pdf), provides sam-
ple Articles with a dissolution provision
that satisfies the requirements of § 1.501(c)
(3)-1(b)(4). Sample dissolution provisions
are also provided in the Instructions for
Form 1023, Application for Recognition of
Exemption Under Section 501(c)(3) of the
Internal Revenue Code and the Instructions
for Form 1023-EZ, Streamlined Applica-
tion for Recognition of Exemption Under
Section 501(c)(3) of the Internal Revenue
Code. These sample dissolution provisions
are substantively similar to the sample dis-
solution provision provided in Rev. Proc.
82-2.
SECTION 3. EFFECT ON OTHER
DOCUMENTS
Rev. Proc. 82-2, 1982-1 C.B. 367, is
obsoleted as of May 24, 2024.
SECTION 4. DRAFTING
INFORMATION
The principal author of this reve-
nue procedure is Christopher Hyde of
1
Unless otherwise specified, all “section” or “§” references are to sections of the Internal Revenue Code or the Income Tax Regulations (26 CFR part 1).

Bulletin No. 2024–22 1333 May 28, 2024
the Office of Associate Chief Counsel
(Employee Benefits, Exempt Organiza-
tions, and Employment Taxes). For fur-
ther information regarding this revenue
procedure, contact Mr. Hyde at (202) 317-
5800 (not a toll-free number).
26 CFR 601.602:

Tax forms and
instructions.
(Also Part I, §§ 1, 223; Part III
§ 54.9831-1)
Rev. Proc. 2024-25
SECTION 1. PURPOSE
This revenue procedure provides the
2025 inflation adjusted amounts for Health
Savings Accounts (HSAs) as determined
under § 223 of the Internal Revenue Code
and the maximum amount that may be
made newly available for excepted ben-
efit health reimbursement arrangements
(HRAs) provided under § 54.9831-1(c)(3)
(viii) of the Pension Excise Tax Regula-
tions.
SECTION 2. 2025 INFLATION
ADJUSTED ITEMS
.01 HSA Inflation Adjusted Items.
(1) Annual contribution limitation. For
calendar year 2025, the annual limitation
on deductions under § 223(b)(2)(A) for an
individual with self-only coverage under a
high deductible health plan is $4,300. For
calendar year 2025, the annual limitation
on deductions under § 223(b)(2)(B) for an
individual with family coverage under a
high deductible health plan is $8,550.
(2) High deductible health plan. For
calendar year 2025, a “high deductible
health plan” is defined under § 223(c)
(2)(A) as a health plan with an annual
deductible that is not less than $1,650 for
self-only coverage or $3,300 for family
coverage, and for which the annual out-
of-pocket expenses (deductibles, co-pay-
ments, and other amounts, but not premi-
ums) do not exceed $8,300 for self-only
coverage or $16,600 for family coverage.
.02 HRA Inflation Adjusted Item.
For plan years beginning in 2025,
the maximum amount that may be made
newly available for the plan year for an
excepted benefit HRA under § 54.9831-
1(c)(3)(viii) is $2,150. See § 54.9831-1(c)
(3)(viii)(B)(1) for further explanation of
this calculation.
SECTION 3. EFFECTIVE DATE
This revenue procedure is effective
for HSAs for calendar year 2025 and for
excepted benefit HRAs for plan years
beginning in 2025.
SECTION 4. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Kyle Walker of the Office
of Associate Chief Counsel (Income Tax
& Accounting). For further information
regarding § 223, HSAs, and excepted ben-
efit HRAs, contact Regan Rusher at (202)
317-5500 (not a toll-free number). For
further information regarding the calcu-
lation of the inflation adjustments in this
revenue procedure, contact Mr. Walker at
(202) 317-4718 (not a toll-free number).

Bulletin No. 2024–22 i May 28, 2024
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
applied 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
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.
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 previously
published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
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.

May 28, 2024 ii Bulletin No. 2024–22
Numerical Finding List
1
Bulletin 2024–22
Announcements:
2024-1, 2024-02 I.R.B. 363
2024-3, 2024-02 I.R.B. 364
2024-5, 2024-05 I.R.B. 635
2024-6, 2024-05 I.R.B. 635
2024-4, 2024-06 I.R.B. 665
2024-7, 2024-07 I.R.B. 673
2024-8, 2024-07 I.R.B. 674
2024-9, 2024-07 I.R.B. 675
2024-12, 2024-08 I.R.B. 676
2024-11, 2024-08 I.R.B. 683
2024-13, 2024-10 I.R.B. 710
2024-10, 2024-11 I.R.B. 711
2024-14, 2024-12 I.R.B. 719
2024-15, 2024-15 I.R.B. 876
2024-16, 2024-16 I.R.B. 909
2024-17, 2024-16 I.R.B. 932
2024-19, 2024-17 I.R.B. 950
2024-20, 2024-19 I.R.B. 1069
2024-18, 2024-21 I.R.B. 1234
2024-21, 2024-21 I.R.B. 1236
Notices:
2024-1, 2024-02 I.R.B. 314
2024-2, 2024-02 I.R.B. 316
2024-3, 2024-02 I.R.B. 338
2024-4, 2024-02 I.R.B. 343
2024-5, 2024-02 I.R.B. 347
2024-6, 2024-02 I.R.B. 348
2024-7, 2024-02 I.R.B. 355
2024-8, 2024-02 I.R.B. 356
2024-9, 2024-02 I.R.B. 358
2024-11, 2024-02 I.R.B. 360
2024-10, 2024-03 I.R.B. 406
2024-12, 2024-05 I.R.B. 616
2024-13, 2024-05 I.R.B. 618
2024-16, 2024-05 I.R.B. 622
2024-18, 2024-05 I.R.B. 625
2024-19, 2024-05 I.R.B. 627
2024-21, 2024-06 I.R.B. 659
2024-22, 2024-06 I.R.B. 662
2024-20, 2024-07 I.R.B. 668
2024-23, 2024-07 I.R.B. 672
2024-24, 2024-10 I.R.B. 707
2024-25, 2024-12 I.R.B. 712
2024-26, 2024-12 I.R.B. 713
2024-27, 2024-12 I.R.B. 715
2024-28, 2024-13 I.R.B. 720
2024-29, 2024-14 I.R.B. 751
2024-31, 2024-15 I.R.B. 869
2024-30, 2024-16 I.R.B. 878
2024-32, 2024-16 I.R.B. 897
2024-33, 2024-18 I.R.B. 959
Notices:—Continued
2024-34, 2024-18 I.R.B. 960
2024-35, 2024-19 I.R.B. 1051
2024-37, 2024-21 I.R.B. 1191
2024-38, 2024-21 I.R.B. 1211
Proposed Regulations:
REG-118492-23, 2024-02 I.R.B. 366
REG-107423-23, 2024-03 I.R.B. 411
REG-121010-17, 2024-05 I.R.B. 636
REG-101552-24, 2024-13 I.R.B. 741
REG-117631-23, 2024-14 I.R.B. 754
REG-108761-22, 2024-16 I.R.B. 933
REG-117542-22, 2024-16 I.R.B. 942
REG-123379-22, 2024-16 I.R.B. 952
REG-115710-22, 2024-20 I.R.B. 1070
REG-118499-23, 2024-20 I.R.B. 1167
REG-117631-23, 2024-21 I.R.B. 1237
Revenue Procedures:
2024-1, 2024-01 I.R.B. 1
2024-2, 2024-01 I.R.B. 119
2024-3, 2024-01 I.R.B. 143
2024-4, 2024-01 I.R.B. 160
2024-5, 2024-01 I.R.B. 262
2024-7, 2024-01 I.R.B. 303
2024-8, 2024-04 I.R.B. 479
2024-9, 2024-05 I.R.B. 628
2024-12, 2024-09 I.R.B. 677
2024-13, 2024-09 I.R.B. 678
2024-14, 2024-09 I.R.B. 682
2024-15, 2024-12 I.R.B. 717
2024-11, 2024-13 I.R.B. 721
2024-17, 2024-15 I.R.B. 873
2024-18, 2024-15 I.R.B. 874
2024-19, 2024-16 I.R.B. 899
2024-20, 2024-19 I.R.B. 1053
2024-21, 2024-19 I.R.B. 1054
2024-24, 2024-21 I.R.B. 1214
2024-22, 2024-22 I.R.B. 1332
2024-25, 2024-22 I.R.B. 1333
Revenue Rulings:
2024-1, 2024-02 I.R.B. 307
2024-2, 2024-02 I.R.B. 311
2024-3, 2024-06 I.R.B. 646
2024-5, 2024-07 I.R.B. 666
2024-4, 2024-10 I.R.B. 686
2024-6, 2024-10 I.R.B. 688
2024-7, 2024-14 I.R.B. 749
2024-8, 2024-16 I.R.B. 877
2024-9, 2024-19 I.R.B. 964
2024-10, 2024-22 I.R.B. 1240
Treasury Decisions:
9984, 2024-03 I.R.B. 386
9985, 2024-05 I.R.B. 573
9986, 2024-05 I.R.B. 610
9987, 2024-06 I.R.B. 648
9988, 2024-15 I.R.B. 794
9989, 2024-15 I.R.B. 850
9990, 2024-19 I.R.B. 966
9992, 2024-21 I.R.B. 1175
9995, 2024-22 I.R.B. 1241
9996, 2024-22 I.R.B. 1317
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 26, 2023.

Bulletin No. 2024–22 iii May 28, 2024
Finding List of Current Actions on
Previously Published Items
1
Bulletin 2024–22
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 26, 2023.

Internal Revenue Service
Washington, DC 20224
Official Business
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