Internal Revenue Bulletin 2024-50 (PDF rendition): IRS Notices

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Bulletin No. 2024–50
December 9, 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
T.D. 10013, page 1220.
This document contains amendments to the regulations
relating to the disclosure of specified return information to
the Census Bureau. The amendments would ensure the effi-
cient and appropriate disclosure of return information to the
Census Bureau and would permit the disclosure of additional
return information pursuant to a request from the Secretary
of Commerce.
EMPLOYEE PLANS
Announcement 2024-38, page 1230.
This announcement notifies the public that the IRS intends
to issue opinion letters on November 29, 2024, or as soon
as possible thereafter, for § 403(b) pre-approved plans that
were updated for changes with respect to the requirements
of § 403(b), including the 2022 Cumulative List, and that
were filed during the second remedial amendment cycle for
§ 403(b) pre-approved plans. This announcement also noti-
fies the public of the date by which an adopting employer
intending to maintain a § 403(b) pre-approved plan for the
second cycle must adopt that plan, and announces the begin-
ning and ending dates of the period during which an adopting
employer may file for an individual determination letter under
the second remedial amendment cycle. This announcement
also discusses a procedural restatement rule that applies to
all pre-approved plans and provides a reminder for adopting
employers of § 403(b)(9) retirement income account plans of
a requirement provided by § 403(b)(9).
EXEMPT ORGANIZATIONS
Announcement 2024-39, page 1231.
Revocation of IRC 501(c)(3) Organizations for failure to meet
the code section requirements. Contributions made to the
organizations by individual donors are no longer deductible
under IRC 170(b)(1)(A).
INCOME TAX
Notice 2024-84, page 1229.
This notice extends the transition process for claiming a stat-
utory exception to the elective payment phaseouts contained
in section 5 of Notice 2024-9, 2024-2 I.R.B. 358. Thus, if an
Applicable Entity provides an attestation described in section
5.02 of Notice 2024-9 with respect to an Applicable Credit
Property the construction of which begins before the later
of January 1, 2027, or the issuance of further guidance, the
Department of the Treasury and the Internal Revenue Service
will treat the attestation as establishing that a Domestic Con-
tent Exception is met with respect to such Applicable Credit
Property.
REG-116017-24, page 1232.
These proposed regulations would provide certain adminis-
trative requirements for unincorporated organizations taking
advantage of modifications to the rules governing elections
to be excluded from the application of partnership tax rules.
They would also require all organizations to submit additional
information before making such an election. These proposed
regulations would affect unincorporated organizations and
their members, potentially including tax-exempt organiza-
tions, the District of Columbia, State and local governments,
Indian Tribal governments, Alaska Native Corporations, the
Tennessee Valley Authority, rural electric cooperatives, and
certain agencies and instrumentalities. The proposed regula-
tions would also update the procedure for obtaining permis-
sion to revoke a section 761(a) election.
T.D. 10012, page 1207.
These final regulations would modify existing requirements
regarding elections by certain unincorporated organizations
to be excluded from the application of otherwise applicable
partnership tax rules. These modifications would apply to
Finding Lists begin on page ii.

certain unincorporated organizations owned, in whole or in
part, by one or more “applicable entities,” including tax-ex-
empt organizations, the District of Columbia, State and
local governments, Indian Tribal governments, Alaska Native
Corporations, the Tennessee Valley Authority, rural electric
cooperatives, and certain agencies and instrumentalities.
After making an election under the modified rules, such own-
ers would be permitted to make elective payment elections
under section 6417(a) of the Code with respect to certain
property held by the unincorporated organization.

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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.
December 9, 2024 Bulletin No. 2024–50

Part I
26 CFR 1.761-2: Exclusion of certain unincorpo-
rated organizations from the application of all or
part of subchapter K of chapter 1 of the Internal
Revenue Code.
T.D. 10012
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 1
Election to Exclude
Certain Unincorporated
Organizations Owned by
Applicable Entities from
Application of the Rules on
Partners and Partnerships
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations.
SUMMARY: This document sets forth
final regulations that modify existing
regulations to allow certain unincorpo-
rated organizations that are owned in
whole or in part by applicable entities to
be excluded from the application of part-
nership tax rules. These regulations affect
unincorporated organizations and their
members, including tax-exempt organiza-
tions, the District of Columbia, State and
local governments, Indian Tribal govern-
ments, Alaska Native Corporations, the
Tennessee Valley Authority, rural electric
cooperatives, and certain agencies and
instrumentalities. The final regulations
also update certain outdated language in
the existing regulations.
DATES: Effective date: These regulations
are effective on January 19, 2025.
Applicability date: For the date of applica-
bility, see §1.761-2(f).
FOR FURTHER INFORMATION
CONTACT: Concerning these final reg-
ulations, contact Cameron Williamson at
(202) 317-6684 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Authority
This document contains amendments
to the Income Tax Regulations (26 CFR
part 1) under section 761(a) of the Internal
Revenue Code (Code) issued by the Sec-
retary of the Treasury (Secretary) pursu-
ant to the authority granted under sections
761(a), 6031(a), 6417(d) and (h), and
7805(a) of the Code (final regulations).
Section 761(a) provides, in part, an
express grant of regulatory authority for
section 761(a) stating, “[u]nder regula-
tions the Secretary may, at the election
of all the members of an unincorporated
organization, exclude such organization
from the application of all or a part of this
subchapter.”
Section 6031(a) provides an express
grant of regulatory authority for the Sec-
retary to prescribe in forms or regulations
partnership reporting information required
“for the purpose of carrying out the provi-
sions of subtitle A.”
Section 6417(d) provides several
express delegations of authority to the
Secretary to enforce requirements for
elective payments of applicable credits
under section 6417 and recapture exces-
sive payments. Section 6417(h) provides
an express delegation of authority with
respect to elective payments under section
6417, stating, in part, that “[t]he Secretary
shall issue such regulations or other guid-
ance as may be necessary to carry out the
purposes of this section.”
Finally, section 7805(a) authorizes the
Secretary to “prescribe all needful rules
and regulations for the enforcement of
[the Code], including all rules and regu-
lations as may be necessary by reason of
any alteration of law in relation to internal
revenue.”
Background
I. Elective payment of applicable credits
Section 6417 was added to the Code
by section 13801(a) of Public Law 117–
169, 136 Stat. 1818, 2003 (August 16,
2022), commonly referred to as the Infla-
tion Reduction Act of 2022 (IRA). Sec-
tion 6417 allows an “applicable entity”
(including tax-exempt organizations,
the District of Columbia, State and local
governments, Indian Tribal governments,
Alaska Native Corporations, the Tennes-
see Valley Authority, rural electric coop-
eratives, and certain agencies and instru-
mentalities) to make an election to treat
an “applicable credit” (as defined in sec-
tion 6417(b)) determined with respect to
such entity as making a payment by such
entity against the tax imposed by subtitle
A of the Code, for the taxable year with
respect to which such credit is determined,
equal to the amount of such credit. Section
6417 also provides special rules relating
to partnerships and directs the Secretary to
provide rules for making elections under
section 6417. Section 13801(g) of the IRA
provides that section 6417 applies to tax-
able years beginning after December 31,
2022.
On March 11, 2024, the Department of
the Treasury (Treasury Department) and
the IRS published in the Federal Regis-
ter (88 FR 40528) final regulations (TD
9988) providing guidance on the section
6417 elective payment election (section
6417 regulations). Section 1.6417-2(a)
(1)(iv) provides that partnerships are not
applicable entities described in section
6417(d)(1)(A) or §1.6417-1(c), regardless
of how many of their partners are them-
selves applicable entities. Accordingly,
any partnership making an elective pay-
ment election must be an electing tax-
payer (as defined in §1.6417-1(g)), and,
as such, the only applicable credits with
respect to which the partnership could
make an elective payment election would
be credits determined under sections 45Q,
45V, and 45X for the time periods allowed
in section 6417(d). However, §1.6417-
2(a)(1)(iii) provides that if an applicable
entity is a co-owner in an applicable credit
property (as defined in §1.6417-1(e)),
through an organization that has made a
valid election under section 761(a) (sec-
tion 761(a) election) to be excluded from
the application of the partnership tax rules
of subchapter K of chapter 1 of the Code
(subchapter K), then the applicable enti-
ty’s undivided ownership share of the
applicable credit property is treated as a
separate applicable credit property owned
Bulletin No. 2024–50 1207 December 9, 2024

by such applicable entity. As a result,
the applicable entity may make an elec-
tive payment election for the applicable
credit(s) determined with respect to such
applicable credit property.
Also on March 11, 2024, the Trea-
sury Department and the IRS published
in the Federal Register (89 FR 17613)
proposed amendments (REG-101552-24)
to the regulations under section 761(a)
to carry out the purposes of section
6417 (proposed regulations). Generally,
the proposed regulations would have
amended certain provisions of §1.761-2 as
in effect and contained in 26 CFR part 1 to
provide that unincorporated organizations
meeting certain requirements (applicable
unincorporated organizations) are eligible
for certain modifications (referred to in
the proposed regulations as “exceptions”)
to the existing requirements for making a
section 761(a) election. The provisions of
the proposed regulations are explained in
greater detail in the preamble to the pro-
posed regulations.
Concurrently with the publication
of these final regulations, the Treasury
Department and the IRS are publishing
in the Proposed Rules section of this edi-
tion of the Federal Register a notice of
proposed rulemaking (REG-116017-24)
proposing to further add to and revise the
provisions of §1.761-2 (November 2024
proposed regulations). The proposed revi-
sions to the provisions of §1.761-2 by the
November 2024 proposed regulations are
explained in greater detail in the preamble
to the November 2024 proposed regula-
tions.
II. Overview of section 761(a) and prior
§1.761-2(a)(3)
Section 761(a) provides, in part, that
under regulations the Secretary may, at
the election of all of the members of an
unincorporated organization, exclude
such organization from the application of
all or part of subchapter K if the organiza-
tion is availed of: (1) for investment pur-
poses only and not for the active conduct
of a business, (2) for the joint production,
extraction, or use of property, but not for
the purpose of selling services or property
produced or extracted, or (3) by dealers in
securities for a short period for the purpose
of underwriting, selling, or distributing a
particular issue of securities, provided that
the income of the members of the orga-
nization may be adequately determined
without the computation of partnership
taxable income.
As discussed in the preamble to the
proposed regulations, unincorporated
organizations seeking to be excluded
from the application of subchapter K so
that one or more of their members can
make an election under section 6417 are
likely to be availed of for the purposes
listed in section 761(a)(2), that is, for
the joint production, extraction, or use
of property, but not for the purpose of
selling services or property produced
or extracted. Pursuant to the authority
in section 761(a), prior §1.761-2(a)(3)
provides additional requirements for an
unincorporated organization to elect to
be excluded from the application of sub-
chapter K under section 761(a)(2). Spe-
cifically, prior §1.761-2(a)(3) requires
that the participants in the joint produc-
tion, extraction, or use of property: (i)
own the property as co-owners, either in
fee or under lease or other form of con-
tract granting exclusive operating rights
(co-ownership requirement), (ii) reserve
the right separately to take in kind or
dispose of their shares of any property
produced, extracted, or used (severance
requirement), and (iii) do not jointly sell
services or the property produced or
extracted (joint marketing requirement),
although each separate participant may
delegate authority to sell the partici-
pant’s share of the property produced or
extracted for the time being for the par-
ticipant’s account, but not for a period
of time in excess of the minimum needs
of the industry, and in no event for more
than one year (one-year exception).
These additional regulatory require-
ments are hereinafter referred to as the
“existing regulatory requirements” and,
along with the previously discussed
statutory requirements, are referred to
herein as the “existing requirements” to
be eligible to elect out of the application
of subchapter K.
As discussed in the Summary of Com-
ments and Explanation of Revisions, the
proposed regulations would have modified
some of the existing regulatory require-
ments for unincorporated organizations
that meet certain requirements.
Summary of Comments and
Explanation of Revisions
The Treasury Department and the IRS
received 11 written comments in response
to the proposed regulations. The com-
ments are available for public inspection
at www.regulations.gov or upon request.
A public hearing on the proposed regu-
lations was scheduled for May 20, 2024.
There were no requests to speak at the
scheduled public hearing. Consequently,
the public hearing was cancelled. See
Election To Exclude Certain Unincorpo-
rated Organizations Owned by Applicable
Entities From Application of the Rules on
Partners and Partnerships; Hearing Can-
cellation, 89 FR 43349 (May 17, 2024).
After full consideration of the comments
received, these final regulations adopt the
proposed regulations with modifications
in response to the comments described in
this Summary of Comments and Expla-
nation of Revisions. The provisions of
§1.761-2 as amended by the final regula-
tions are referred to as “revised §1.761-2”
in this Summary of Comments and Expla-
nation of Revisions.
Comments merely summarizing the
statute or proposed regulations, recom-
mending statutory revisions to section
761 or other statutes, addressing unre-
lated issues, or recommending changes
to IRS forms or procedures are generally
not addressed in this Summary of Com-
ments and Explanation of Revisions
or adopted in these final regulations.
These comments included recommen-
dations and questions regarding fact
patterns specific to section 6417, the
domestic content rules of section 45(b)
(10), the credit for qualified commercial
clean vehicles of section 45W, and the
credit for alternative fuel vehicle refu-
eling property of section 30C. While
the Treasury Department and the IRS
are studying some of those issues and
intend to issue future guidance on those
provisions, those recommendations and
questions are unrelated to the purpose of
these final regulations. Unless otherwise
indicated in this Summary of Comments
and Explanation of Revisions, provi-
sions of the proposed regulations with
respect to which no comments were
received are adopted without substan-
tive change.
December 9, 2024 1208 Bulletin No. 2024–50

Bulletin No. 2024–50 1209 December 9, 2024
I. Overview
Proposed §1.761-2(a)(4)(ii) would
have defined “applicable unincorporated
organizations” as unincorporated organi-
zations that meet several requirements.
Proposed §1.761-2(a)(4)(iii) would have
modified the regulatory requirements in
prior §1.761-2(a)(3)(i) and (iii) for an
applicable unincorporated organization
that also met the regulatory requirements
of prior §1.761-2(b) and (e).
Part II of this Summary of Comments
and Explanation of Revisions discusses
comments received concerning the gen-
eral effects of a section 761(a) election.
Part III of this Summary of Comments and
Explanation of Revisions discusses the
comments received on the definition of an
applicable unincorporated organization.
Part IV of this Summary of Comments and
Explanation of Revisions discusses the
comments received on the modifications
to the existing regulatory requirements.
Part V of this Summary of Comments
and Explanation of Revisions discusses
the applicability date of these final regu-
lations, the elimination of certain obso-
lete language, and certain administrative
requirements that are under consideration
for organizations taking advantage of the
modifications to the existing regulatory
requirements. Part VI of this Summary of
Comments and Explanation of Revisions
summarizes two comments not addressed
in these final regulations.
II. Effects of an Election under Section
761(a)
A. General
Subchapter K provides rules governing
the taxation of partners and partnerships.
When an unincorporated organization
makes a valid section 761(a) election out
of subchapter K, the rules of subchapter
K no longer apply to that organization.
As a result, for purposes of subchapter K,
the unincorporated organization ceases to
be a partnership and each member of the
unincorporated organization is generally
treated as a co-owner, that is, as directly
owning its proportionate share of the orga-
nization’s assets.
For example, an unincorporated organi-
zation that has made a valid section 761(a)
election is not subject to section 704, which
provides the rules for determining a part-
ner’s distributive share of a partnership’s
tax items. Instead, each member of an
unincorporated organization that has made
a valid section 761(a) election takes into
account directly its ownership share of the
organization’s tax items. Accordingly, if an
unincorporated organization with a valid
section 761(a) election purchases deprecia-
ble property, an owner of a 30 percent inter-
est in the organization may claim deprecia-
tion deductions as if it owned an undivided
30 percent interest in the organization’s
property (provided the owner is otherwise
eligible for such deductions). That mem-
ber cannot claim depreciation deductions
beyond that member’s ownership interest
in the organization’s property. Thus, any
agreement among the members to specially
allocate one member’s depreciation deduc-
tions to another member would make the
organization ineligible for a section 761(a)
election.
One commenter asked for clarifica-
tion of whether the following fact pat-
tern is compatible with an election under
section 761(a). A church (an applicable
entity) forms a partnership with a non-
profit investor and a for-profit developer.
The church contributes a site for energy
property, which generates electricity and
reduces the church’s energy bill. The non-
profit investor makes grants and loans to
the organization and is repaid by virtue of
renewable energy credits or net metering
from the clean energy property. The for-
profit developer enters into a contract to
maintain the system in exchange for a fee.
The facts described in the comment let-
ter do not provide sufficient information to
determine whether this situation is compat-
ible with a section 761(a) election. If the
investor receives all payments in its capac-
ity as a lender and the for-profit developer
receives its profits in its capacity as a third-
party service provider, there might not be
an unincorporated organization at all. If
there is an unincorporated organization and
it intends to make a section 761(a) election,
each of its members must reserve the right
separately to take in kind or dispose of their
shares of any property produced, extracted,
or used. If the investor or developer
receives payments in excess of its pro rata
ownership interests, this requirement will
not be met. Moreover, if the contributions
mentioned in this situation are intended
to be non-recognition transfers for Fed-
eral income tax purposes, the contributing
members would generally need to make
such contributions under section 721(a),
which is part of subchapter K. However,
if a section 761(a) election is made, the
organization is not subject to subchapter K,
and thus, section 721(a) is inapplicable to
transfers to the organization. Without sec-
tion 721(a), the transfers would generally
be taxable events.
One commenter asked how certain capi-
tal stacking combinations (including loans,
forgivable loans, and grants) affect an
organization’s eligibility to make a section
761(a) election. To make a valid section
761(a) election, an unincorporated organi-
zation must comply with the requirements
of section 761(a) and revised §1.761-2.
Provided that those requirements are met,
the structure of an organization’s capital
stack would not appear to preclude it from
making a valid section 761(a) election.
Federal income tax law governs the treat-
ment of these arrangements for purposes
of determining whether an arrangement
violates the requirements of section 761(a).
For example, loans between members of
the organization will be treated as debt to
the extent they are treated as debt under
Federal income tax law. Likewise, loans by
a member to an organization would not be
treated as a partnership liability under sec-
tion 752, but a loan to each member of the
organization in proportion to the member’s
ownership interest.
One commenter asked that applicable
entities who are members in an applicable
unincorporated organization that makes a
761(a) election be permitted to claim all
applicable tax credit bonuses and adders.
Bonus credit amounts, such as amounts
for applicable credit properties located
in energy communities, apply to property
co-owned through an applicable unin-
corporated organization. The Treasury
Department and the IRS have determined
that no change to the final regulations is
required to clarify this issue.
B. Effect of a Section 761(a) Election
on Sections of the Code Outside of
Subchapter K
One commenter requested a discussion
of the effects of a section 761(a) election

December 9, 2024 1210 Bulletin No. 2024–50
on provisions of the Code outside of sub-
chapter K that reference partnerships,
including section 6417. A detailed dis-
cussion of the effects of a section 761(a)
election on provisions of the Code outside
of subchapter K would require a careful
examination of numerous provisions of
the Code apart from those relevant to these
final regulations and is not necessary for
purposes of these final regulations. How-
ever, the application of a section 761(a)
election to section 6417 is fundamental
to the purpose of these final regulations,
which is to carry out the purposes of sec-
tion 6417 and thus, is addressed herein.
An organization with a valid section
761(a) election may be treated as a part-
nership for purposes of sections of the
Code outside of subchapter K. In Bryant v.
Commissioner, 46 T.C. 848 (1966), aff’d,
399 F.2d 800 (5th Cir. 1968), the Tax Court
concluded that an organization that made
a section 761(a) election was still a part-
nership for purposes of other parts of the
Code, including the $50,000 investment
tax credit limit on partnership assets pro-
vided by then section 48(c)(2)(D) of the
Code. See also Cokes v. Commissioner,
91 T.C. 222 (1988) (section 761 election
did not affect partnership status under the
self-employment tax provisions of section
1402(a) of the Code); Madison Gas and
Electric Company v. Commissioner, 72
T.C. 521 (1979), aff’d, 633 F.2d 512 (7
th

Cir. 1980) (notwithstanding a section 761
election, the startup costs of a joint ven-
ture were attributable to the partnership
business and were not deductible under
section 162(a) of the Code as the ordinary
and necessary business expenses of the
individual partners).
Though section 6417 is not in subchap-
ter K, a section 761(a) election affects
whether an entity is treated as a partner-
ship for purposes of section 6417. Section
6417(h) provides that the Secretary shall
issue such regulations or other guidance
as may be necessary to carry out the pur-
poses of section 6417. Pursuant to this
broad authority, the Treasury Department
and the IRS published §1.6417-2(a)(1)
(iii), which provides that if an applicable
entity is a co-owner in an applicable credit
property through an organization that
has made a valid section 761(a) election,
then the applicable entity’s undivided
ownership share of the applicable credit
property will be treated as a separate
applicable credit property owned by such
applicable entity, and the applicable entity
may make an elective payment election
for the applicable credits determined with
respect to such applicable credit property.
This means that a section 761(a) election
effectively causes an unincorporated orga-
nization not to be treated as a partnership
for purposes of section 6417, including
section 6417(c). Thus, the effect of a valid
section 761(a) election for purposes of
section 6417 is that each member of the
organization is treated as directly owning
its proportionate share of the applicable
credit property. As a result, each applica-
ble entity member of the organization may
make an elective payment election (or, if
not an applicable entity member, a transfer
election under section 6418) with respect
to its proportionate share of the applicable
credit property.
Another commenter requested confir-
mation that a Tribal Energy Development
Organization that makes a section 761(a)
election is not a partnership for purposes
of sections 168(h)(5) and (6) and 50(b)(3).
Section 168(h) describes tax-exempt
use property (generally, certain prop-
erty leased to a tax-exempt entity), the
cost recovery of which is subject to
special rules. Section 168(h)(5) gener-
ally provides that the determination of
whether property leased to a partnership
is tax-exempt use property shall be made
by treating each tax-exempt entity part-
ner’s proportionate share as being leased
to such partner. Section 168(h)(6) gener-
ally provides that, if any property which
is not tax-exempt use property is owned
by a partnership that has as partners both
a tax-exempt entity and a person who is
not a tax-exempt entity, an amount equal
to such tax-exempt entity’s proportionate
share of such property is treated as tax-ex-
empt use property. This rule applies only
if any allocation to the tax-exempt entity
of partnership items is not a “qualified
allocation,” which (i) is consistent with
such entity’s being allocated the same
distributive share of each item of income,
gain, loss, deduction, credit, and basis and
such share remains the same during the
entire period the entity is a partner in the
partnership, and (ii) has substantial eco-
nomic effect within the meaning of sec-
tion 704(b)(2). See section 168(h)(6)(B).
Section 50(b)(3) and (4) preclude certain
property used by tax-exempt organiza-
tions, governmental entities, and foreign
persons from qualifying for an investment
tax credit. For these purposes, section
50(b)(4)(D) provides that rules similar to
those in section 168(h)(5) and (6) apply.
The existence of a partnership for pur-
poses of these sections does not change
the amount of depreciation deductions
attributable to each member of an unin-
corporated organization that has validly
made a section 761(a) election. A valid
section 761(a) election requires the shares
of property leased to or owned by an orga-
nization to be treated as leased to or owned
by the members of the organization in pro-
portion to their shares of the organization.
This is how partnership property would be
treated under section 168(h)(5) and would
cause all allocations to the partners to be
treated as “qualified allocations” for pur-
poses of section 168(h)(6). Similarly, the
IRS has determined in other areas of the
law that co-owners of property may make
independent elections with respect to
deductions affecting their taxable income.
See Rev. Rul. 83-129, 1983-2 C.B. 105,
in which the IRS ruled that the co-own-
ers of mineral leases that make a section
761(a) election may independently elect
to deduct or capitalize their shares of min-
ing development costs under section 616
of the Code; see also Rev. Rul. 81-261,
1981-2 C.B. 60, where the IRS noted that
if a partnership makes a section 761(a)
election, each partner is deemed to own
directly its proportionate share of the part-
nership property for purposes of comput-
ing depreciation. Moreover, in the case of
an applicable entity that makes an election
under section 6417(a), section 6417(d)
(2)(A) provides that applicable credits
are determined without regard to section
50(b)(3) and (4)(A)(i).
III. Applicable Unincorporated
Organizations
A. Applicable Entity Owner
Proposed §1.761-2(a)(4)(ii)(A) would
have required an applicable unincorpo-
rated organization to be owned, in whole
or in part, by one or more applicable enti-
ties, as defined in section 6417(d)(1)(A)
and §1.6417-1(c). The Treasury Depart-

Bulletin No. 2024–50 1211 December 9, 2024
ment and the IRS received no comments
related to this section and adopt the pro-
posed language without changes.
B. Joint Operating Agreements
Proposed §1.761-2(a)(4)(ii)(B) would
have provided that an applicable unincor-
porated organization must be an organi-
zation the members of which enter into a
joint operating agreement (JOA) in which
the members reserve the right separately
to take in kind or dispose of their pro
rata shares of the electricity produced,
extracted, or used, and any associated
renewable energy credits or similar cred-
its. Proposed §1.761-2(a)(4)(ii)(C) would
also have provided, in part, that an appli-
cable unincorporated organization must
be organized pursuant to a JOA.
1. General
Commenters requested more infor-
mation about the types of JOAs required
by these provisions. Some comment-
ers requested examples of permissible
JOAs, and another commenter requested
identification of any JOA provisions that
would “create issues” for a JOA. One
commenter asked whether JOAs that sat-
isfy the requirements of §1.761-2(a)(3)
would also satisfy the requirements of
proposed §1.761-2(a)(4)(ii)(B) and (C)
and requested that any specific rules appli-
cable to JOAs solely for purposes of the
proposed regulations apply prospectively
so as to avoid any uncertainty with respect
to existing JOAs.
As used in the proposed regulations,
the term “joint operating agreement” is
intended to refer to agreements similar to
those used by organizations that made an
election under section 761(a) prior to the
proposed regulations. Such agreements
typically provide the terms by which the
members of the unincorporated organiza-
tion will meet the existing requirements
to make a section 761(a) election. JOAs
should continue to serve this purpose
under the final regulations, regardless of
whether an applicable unincorporated
organization holds its property in an entity
organized under local law. Accordingly,
as a general matter, a JOA that satisfies
the requirements of revised §1.761-2(a)
(1) and (3) will satisfy the requirements in
revised §1.761-2(a)(4)(ii)(B) and (C), pro-
vided that the organization to which that
JOA applies satisfies the existing regula-
tory requirements, as modified by revised
§1.761-2(a)(4)(iii), if applicable. Because
the final regulations do not change the
rules currently applicable to JOAs, these
final regulations do not need to make such
rules apply prospectively. For the same
reason, further clarification of the JOA
requirements is unnecessary.
2. Right to Pro Rata Share
Commenters requested clarification
of how credits and ownership interests
would be allocated when members of an
unincorporated organization reserve the
right separately to take in kind or dispose
of their pro rata shares of the electricity
produced, extracted, or used, and any
associated renewable energy credits or
similar credits.
Pursuant to proposed §1.761-2(a)(4)
(ii)(B), each member of an applicable
unincorporated organization would have
been required to reserve the right sepa-
rately to take in kind or dispose of their
pro rata shares of any property produced,
extracted, or used, and any associated
renewable energy credits or similar cred-
its. The determination of each member’s
ownership interest of an unincorporated
organization (and, accordingly, each
member’s proportionate share of prop-
erty produced, extracted, or used) must be
made by the members and based on their
ownership interests in the same manner as
if they were co-owners in the underlying
properties.
To illustrate, a co-owner of 40 percent
of an unincorporated organization that
has made a section 761(a) election must
reserve the right separately to take in kind
or dispose of its 40 percent pro rata share
of the property produced, extracted, or
used by the co-owners. This is true even
when the members of an applicable unin-
corporated organization own property
through an entity, as permitted by revised
§1.761-2(a)(4)(iii)(A). Example 1 has
been added in revised §1.761-2(a)(5)(i) to
illustrate the general rule.
One commenter requested clarification
that renewable energy certificates (RECs)
produced through the generation of clean
energy qualify as “similar credits” for
these purposes. The Treasury Department
and the IRS clarify that RECs are included
as “renewable energy credits or similar
credits” pursuant to revised §1.761-2(a)
(4)(ii)(B) and thus, each member of an
unincorporated organization must reserve
the right separately to take in kind or dis-
pose of their pro rata shares of any RECs
generated as a result of the organization’s
activities.
3. Joint Marketing
Some commenters asked whether spe-
cific JOA provisions or activities would
violate requirements that apply to appli-
cable unincorporated organizations,
including that the organization’s members
do not jointly sell services or property
produced or extracted. One commenter
asked whether appointing a manager, cre-
ating an ownership committee, having
expense-sharing agreements or incurring
project-level debt would violate the exist-
ing requirements to make a section 761(a)
election. Another commenter requested
clarification that a managing member or
general partner-equivalent (presumably,
if the unincorporated organization takes
advantage of the modification in proposed
§1.761-2(a)(4)(iii)(A)) can conduct nor-
mal project management functions for
an unincorporated organization without
violating the joint marketing requirement.
That commenter requested, in the alter-
native, a “roadmap” setting forth how a
managing member or general partner can
comply with the joint marketing require-
ment in a practical manner. The same
commenter also requested allowing repre-
sentatives of an unincorporated organiza-
tion to perform pre-filing and other min-
isterial services on behalf of the entities
jointly owning applicable credit property.
An applicable unincorporated organi-
zation must meet all applicable require-
ments, including the existing require-
ments with the modifications contained
in these final regulations, to elect out of
subchapter K under section 761(a) and to
maintain a section 761(a) election. Gen-
erally, the members of an unincorporated
organization are permitted to have a rep-
resentative handle management and min-
isterial duties typical of a managing mem-
ber of a limited liability company (LLC)
or general partner of a limited partnership

December 9, 2024 1212 Bulletin No. 2024–50
without violating these requirements. The
Treasury Department and the IRS under-
stand that representatives with such duties
may be required by local law for entities
that may hold the organization’s property
under §1.761-2(a)(4)(iii)(A) of these final
regulations. These final regulations, how-
ever, do not provide a “roadmap” for per-
missible arrangements or rights and duties
of such representatives as the list would
not be exhaustive and could cause unin-
tentional inferences to be drawn.
One commenter proposed allowing an
applicable entity to direct some or all of
its elective payments of applicable credit
amounts under section 6417 to a separate
account jointly owned by the applicable
entity and other members of an applica-
ble unincorporated organization to pay
expenses directly related to the underlying
applicable credit property’s co-ownership.
The commenter suggested applying rules
similar to those applicable to assignments
of payments under section 1603 (regard-
ing grants for specified energy properties
in lieu of tax credits) of the American
Recovery and Reinvestment Act of 2009,
Public Law 111-5, 123 Stat. 115 (2009),
including that each payment be assigned to
a bank or other financing institution, that
the assignment cover all amounts payable
and not be subject to further assignment
(except that any assignment may be made
to one party acting as an agent or trustee
for the co-owners), and that the assignee
file a Notice of Assignment.
As already discussed, §1.6417-2(a)(1)
(iii) provides that if an applicable entity
is a co-owner in an applicable credit
property through an organization that
has made a valid section 761(a) elec-
tion, then the applicable entity’s undi-
vided ownership share of the applicable
credit property will be treated as a sepa-
rate applicable credit property owned by
such applicable entity, and the applicable
entity may make an election under sec-
tion 6417(a) for the applicable credits
determined with respect to such applica-
ble credit property. When an applicable
entity makes an election under section
6417(a), such entity is treated as making
a payment against the tax imposed by
subtitle A of the Code. If this payment
causes the entity to have an “overpay-
ment” of tax in a taxable year, section
6402(a) generally provides that the entity
may receive a refund equal to the amount
of the overpayment over the entity’s tax
liability. This refund must be made to the
person who made the overpayment (i.e.,
the applicable entity). If that applicable
member is a partnership or S corporation,
section 6417(c)(1)(A) specifies that the
payment for such election is made to the
partnership or S corporation that made
the section 6417(a) election. Accord-
ingly, similar to the general rule under
section 6417(a), refunds or payments
under section 6417(c) generally cannot
be paid to accounts in the name of some-
one other than the entity making the elec-
tion. A valid section 761(a) election does
not affect the application of this general
rule and, therefore, these final regulations
do not adopt the commenter’s proposal.
C. Purpose of Organization
Proposed §1.761-2(a)(4)(ii)(C) would
have provided that an organization is an
applicable unincorporated organization
if it “is organized exclusively to produce
electricity from its applicable credit prop-
erty (as defined in §1.6417-1(e)) and with
respect to which one or more applicable
credits listed in section 6417(b)(2), (4),
(8), (10), and (12) is determined.” The
scope of this rule was intended to remove
certain impediments for these types of
applicable unincorporated organizations
that would otherwise comply with exist-
ing requirements. The Treasury Depart-
ment and the IRS sought comments on the
scope and requirements of the proposed
regulations, including whether modifica-
tions similar to those in proposed §1.761-
2(a)(4)(iii) are needed for applicable enti-
ties that own applicable credit properties
that do not produce electricity.
Commenters generally recommended
that the modifications in proposed §1.761-
2(a)(4)(iii) are also needed for orga-
nizations organized to own applicable
credit property with respect to which any
other applicable credit listed in section
6417(b) is determined. Some comment-
ers requested clarity that certain facili-
ties, especially battery storage facilities,
“produce electricity” for purposes of the
definition of an applicable unincorporated
organization. One commenter asserted
that the “non-generative” credits from
section 6417(b) that were not included in
proposed §1.761-2(a)(4)(ii)(C) could be
claimed by organizations “availed of...
for the joint...use of property” and that
such organizations should therefore be
permitted to make a section 761(a) elec-
tion if other existing requirements are met.
The same commenter requested clarifica-
tion that certain activities with respect to
applicable credits, including time-limited
delegations of relevant powers, would
not violate the existing requirements to
make a section 761(a) election. Another
commenter asked for clarification that
common, non-electricity revenue streams
related to jointly owned projects, such
as revenues from the sale of capacity
and ancillary services, do not violate the
requirement that an organization must be
organized exclusively to produce electric-
ity.
The Treasury Department and the
IRS agree that organizations formed
to own applicable credit property with
respect to which any applicable credits
(including non-generative credits) are
determined should be permitted to apply
the modifications to the existing section
761(a) rules contained in the proposed
regulations. Section 761(a)(2) refers to
organizations availed of “for the joint
production, extraction, or use of prop-
erty,” which is not limited to activities
that produce electricity. Accordingly,
pursuant to the authority in sections
761(a) and 6417(h), the final regulations
revise the definition of an applicable
unincorporated organization to include
organizations organized exclusively to
own and operate applicable credit prop-
erty (as defined in §1.6417-1(e)). The
adoption in the final regulations of this
definition of applicable unincorporated
organization should not be read to imply
that any particular factual arrangement
permits a valid section 761(a) election.
To make a valid section 761(a) election,
an unincorporated organization, includ-
ing an applicable unincorporated orga-
nization, must meet all the requirements
of section 761(a) and the regulations
thereunder.
D. Section 6417 Election
Proposed §1.761-2(a)(4)(ii)(D) would
have provided that an unincorporated
organization is an applicable unincorpo-

Bulletin No. 2024–50 1213 December 9, 2024
rated organization only if one or more of
its applicable entity members will make
an elective payment election under sec-
tion 6417(a) for the applicable credits
determined with respect to its share of the
applicable credit property.
One commenter recommended extend-
ing the modifications in proposed §1.761-
2(a)(4)(iii) to organizations for which
no applicable entity member will make
an election under section 6417. These
final regulations are of limited scope and
are promulgated, in part, pursuant to the
authority in section 6417(h) to carry out
the purposes of section 6417 by facili-
tating joint-ownership arrangements of
applicable credit property by applicable
entities. These final regulations do not
adopt this commenter’s recommendation
because it is not necessary for purposes of
these final regulations.
E. Other Requirements
Proposed §1.761-2(a)(4)(ii) would
have provided that an applicable unincor-
porated organization is an unincorporated
organization described in prior §1.761-
2(a)(1) that meets the requirements of
proposed §1.761-2(a)(4)(ii)(A) through
(D). The reference to prior §1.761-2(a)(1)
was intended to emphasize the statutory
requirements under section 761(a) and
prior §1.761-2(a)(1) that: (1) the members
of the unincorporated organization must
be able to compute their income without
the necessity of computing partnership
income, and (2) the unincorporated orga-
nization must not be a syndicate, group,
pool, or joint venture which is classifiable
as an association, or operate under an
agreement which creates an organization
classifiable as an association. For clarity,
the final regulations remove the refer-
ence to prior §1.761-2(a)(1) in proposed
§1.761-2(a)(4)(ii) and include the require-
ments of prior §1.761-2(a)(1) as revised
§1.761-2(a)(4)(ii)(E) and (F). In the final
regulations, therefore, an applicable unin-
corporated organization is an unincorpo-
rated organization that meets the require-
ments of revised §1.761-2(a)(4)(ii)(A)
through (F).
One commenter requested that a
Tribal Energy Development Organization
(TEDO) be permitted to make an elective
payment election regardless of its partner-
ship status and be permitted to make spe-
cial allocations. A TEDO that is formed as
a partnership and meets the requirements
may make a 761(a) election. Section
761 does not apply, however, to entities
formed as corporations. In addition, spe-
cial allocations are inconsistent with a
section 761(a) election, which is available
under the statute only to organizations
that satisfy the severance requirement and
the members of which can compute their
income without the necessity of comput-
ing partnership taxable income. Accord-
ingly, the final regulations do not adopt
these requested changes.
Another commenter requested clarity
about the eligibility of a “partnership flip”
structure to make a section 761(a) election.
Generally, these structures involve alloca-
tions of income, gains, losses, deductions,
or credits that change at some point after
the partnership has been formed. In the
commenter’s proposed structure, a taxable
member of an unincorporated organiza-
tion does not control the organization but
owns a profits interest in the organization
that allows the member to earn preferred
returns over the course of its investment.
The commenter suggested that this type of
member should be permitted to individu-
ally elect out of partnership tax treatment
under subchapter K, and then elect back
into partnership treatment under subchap-
ter K after it has recouped its investment.
Partnership flip structures, such as the
one described by the commenter, violate
the existing statutory requirements for
electing out of subchapter K, even as mod-
ified by proposed §1.761-2(a)(4)(iii). This
is because such structures provide mem-
bers with disproportionate amounts of
income, gains, losses, deductions, or cred-
its and thereby require an unincorporated
organization to compute partnership tax-
able income to determine each member’s
share of the organization’s income. These
arrangements are also incompatible with
the severance requirement, under which
members must reserve the right separately
to take in kind or dispose of their shares of
any property produced, extracted, or used
because members do not have a deter-
minate “share” of the applicable credit
property. For these reasons, the Treasury
Department and the IRS clarify that part-
nership flip structures are not eligible to
make a section 761(a) election.
IV. Specified Modifications for Applicable
Unincorporated Organizations
A. Modified Co-ownership Requirement
For applicable unincorporated organi-
zations, proposed §1.761-2(a)(4)(iii)(A)
would have modified the co-ownership
requirement such that the participants in
the applicable unincorporated organiza-
tion would be permitted to own applicable
credit property through an unincorporated
organization that is a legal entity, other
than one treated as a corporation under
any provision of the Code (modified
co-ownership requirement).
One commenter requested confirma-
tion whether the following situation is
compatible with an election under section
761(a). A tax-exempt entity forms an LLC
to raise money and serve as a special pur-
pose vehicle to own and operate a clean
energy project. The tax-exempt entity then
sells equity securities in the LLC to inves-
tors. Prior to submitting the pre-filing reg-
istration with the IRS, the LLC makes an
election under section 761(a). The tax-ex-
empt entity or operator then decides if,
and when, investors should be paid divi-
dends based on their fractional ownership.
This situation is inconsistent with
the modified co-ownership requirement.
Organizations that have made a section
761(a) election do not pay dividends for
Federal income tax purposes. Because
each member of such organization is gen-
erally treated as directly owning its propor-
tionate share of the organization’s assets,
each member is entitled to payments or
credits with respect to the member’s share
of property produced, extracted, or used,
regardless of whether any other member
would have approved the distribution of
such amounts.
B. Joint Marketing Modification and
Agent Delegation Rule
For applicable unincorporated organi-
zations, proposed §1.761-2(a)(4)(iii)(B)
would have modified the joint marketing
requirement in prior §1.761-2(a)(3)(iii)
to provide that a delegation of authority
to sell the participant’s share of the prop-
erty produced may allow the delegee to
enter into contracts the duration of which
exceeds the minimum needs of the indus-

December 9, 2024 1214 Bulletin No. 2024–50
try and may be for longer than one year
(the joint marketing modification), pro-
vided that the delegation of authority to act
on behalf of the participant may not be for
a period of time that exceeds the minimum
needs of the industry, and in no event for
more than one year (the agent delegation
rule). Proposed §1.761-2(a)(4)(vi) would
have provided an example illustrating
this modification to the existing regula-
tory requirements, in which each member
of an unincorporated organization grants
to the same agent a one-year delegation
(not exceeding the minimum needs of
the industry) of the member’s authority
to sell the member’s share of electricity
produced by the organization. The agent
commits each member to a 15-year power
purchase agreement (PPA). Because the
delegation of authority is for a period no
longer than one year, the requirements of
proposed §1.761-2(a)(4)(iii)(B) are met.
Commenters requested clarification
on several issues relating to the joint
marketing modification. Some comment-
ers asked whether two or more members
of an applicable unincorporated orga-
nization that has made a section 761(a)
election may sell their share of the orga-
nization’s output in the same contract.
Some commenters also asked whether
the 15-year period for the contract in the
example is intended to serve as a safe
harbor or limitation on the duration of
such agreements.
Provided that the agent delegation rule
and all other requirements under section
761(a) are satisfied, the joint marketing
modification allows members of an appli-
cable unincorporated organization to enter
into contracts of any duration. Multiple
members of the same applicable unincor-
porated organization may be party to the
same contract. Members can also choose
to sell their shares without a multi-year
contract. The example merely illustrates
the joint marketing modification and is
not intended to be a safe harbor. No clari-
fication is required to the joint marketing
modification in the final regulations.
Commenters also requested clari-
fication of the agent delegation rule.
One commenter asked whether an agent
would be subject to the rule if it was
an Indian Tribal government or other
applicable entity. Some commenters
suggested eliminating the one-year lim-
itation on agent delegations or allowing
agent delegations to automatically renew
after each year. One commenter sug-
gested that certain organizations would
need to sell their output into an orga-
nized market rather than pursuant to a
fixed PPA. In this situation, according
to the commenter, authority to sell the
output for each applicable entity may
need to be pursuant to an agreement that
automatically renews annually. Another
commenter suggested that the one-year
limitation on agent delegations will harm
applicable entities without technical
expertise because non-applicable entities
with their own expertise will not require
an agent and could be able to take advan-
tage of an applicable entity that is only
able to use an agent for one year. Another
commenter asked for clarification that
a member of an unincorporated organi-
zation may delegate powers to an agent
without limitation as long as no other
member makes such a delegation.
The purpose of the agent delegation
rule is to fulfill the statutory requirement
in section 761(a)(2) that no organiza-
tion making a section 761(a) election is
formed “for the purpose of selling ser-
vices or property produced or extracted.”
This is a prohibition on joint marketing;
accordingly, any member of an unincor-
porated organization may have an agent
for any duration of time, provided that
the agent does not represent more than
one member of the applicable unincor-
porated organization. The agent delega-
tion rule applies to any person or group
of people acting on behalf of more than
one member of an unincorporated orga-
nization, regardless of their status as an
applicable entity.
The longstanding one-year exception
to the joint marketing requirement in the
existing regulations reflects a balancing
of the statutory language with commer-
cial necessities, and the proposed regula-
tions reflected a similar balancing. Sec-
tion 761(a)(2) does not permit an electing
organization to conduct sales through an
agent with indefinite authority on behalf
of multiple members. Such a structure is
necessarily “availed of...for the purpose
of selling services or property produced or
extracted” and is not eligible to elect out
of subchapter K. These final regulations,
therefore, do not adopt the suggestions
to eliminate the agent delegation rule or
allow agent delegations to automatically
renew. However, in any given year, an
agent may be delegated authority on terms
identical to those in a past year, provided
that the delegation of authority to act is
not for a period of time that exceeds the
minimum needs of the industry and each
member delegating authority to that agent
consents to those terms in writing at least
once per year. Example 3 has been added
in revised §1.761-2(a)(5)(iii) to illustrate
this rule.
One commenter requested that the
phrase “minimum needs of the industry”
be either clarified or deleted. That phrase
is intended to be fact-sensitive; like the
rest of the joint marketing requirement,
the phrase is intended to balance statutory
requirements with commercial necessi-
ties. These final regulations, therefore, do
not adopt the commenter’s request to clar-
ify or eliminate it.
C. Specific Examples
Several commenters generally asked
for more examples showing applications
of the proposed regulations. In response,
the Treasury Department and the IRS have
added two examples to the final regula-
tions.
V. Additional Information
A. Applicability date
Except as provided in §1.761-2(d),
these final regulations apply to taxable
years ending on or after March 11, 2024,
the date on which the proposed regu-
lations were published in the Federal
Register. An applicable unincorporated
organization that validly made a section
761(a) election meeting the requirements
of these final regulations for a taxable year
ending on or after March 11, 2024, will
be treated as having made a valid section
761(a) election even if the election was
made prior to the publication of these final
regulations in the Federal Register.
B. Administrative Requirements
The preamble to the proposed regula-
tions noted that the Treasury Department
and the IRS were considering certain rules

Bulletin No. 2024–50 1215 December 9, 2024
to prevent abuse of the modifications in
proposed §1.761-2(a)(4)(iii). One rule
described in the preamble to the proposed
regulations would have prevented the
deemed election rules in prior §1.761-2(b)
(2)(ii) from applying to any unincorpo-
rated organization relying on a modifica-
tion in proposed §1.761-2(a)(4)(iii). One
commenter recommended against adopt-
ing such a rule, which the commenter
believed would be inconsistent with the
goals of the proposed regulations and
increase the likelihood of inadvertent dis-
allowances of section 761(a) elections in
non-abusive situations.
Although these final regulations do
not adopt any rules regarding deemed
elections, more administrative guidance
is needed under section 761(a) to fulfill
the purposes of section 6417. As a result,
concurrently with the publication of these
final regulations, the Treasury Depart-
ment and the IRS are publishing in the
Proposed Rules section of this edition of
the Federal Register the November 2024
proposed regulations under section 761(a)
(REG-116017-24), which would provide
rules affecting the validity of elections
under section 761(a) by applicable unin-
corporated organizations whose elections
would not have been valid without the
application of revised §1.761-2(a)(4)(iii).
C. Obsolete language
Section 1.761-2(b)(3)(i) provides, in
part, that an application for permission to
revoke a section 761(a) election must be
submitted to the Commissioner of Inter-
nal Revenue, Attention: T:I, Washington,
DC 20224, no later than 30 days after the
beginning of the first taxable year to which
the revocation is to apply. This language
no longer reflects the correct procedure for
obtaining permission to revoke a section
761(a) election and is therefore eliminated
by these final regulations. The November
2024 proposed regulations would instead
provide that such an application must be
made by submitting a letter ruling request
that complies with the requirements of
Rev. Proc. 2024-1 or successor guidance.
Section 1.761-2(b)(3)(i) also provides, in
part, that a section 761(a) will be effective
unless a member of the organization sends
proper notice to the Commissioner “within
90 days after the formation of the organi-
zation (or by October 15, 1956, whichever
is later)...”. The final regulations would
strike the parenthetical language to update
and streamline the paragraph.
VI. Comments That Are Not Addressed in
These Final Regulations
Two comments received were related
to section 761 but outside the scope of
these final regulations. These comments
are summarized in this Part VI.
A. Implementation
One commenter asked for clarification
of how audits of joint structures would
take place, including by identifying the
specific parts of Treasury and the IRS
involved in such audits and the standard
of review for such audits. Another com-
menter requested the development of
educational materials, “office hours,” and
other guidance to improve understanding
of the regulations and uptake of applica-
ble credits. Another commenter requested
that the Treasury Department and the IRS
provide clear rules for the pre-registra-
tion filing process for applicable credit
property co-owned by taxpayers making
transferability elections. These final regu-
lations do not provide information about
audit procedures or the development of
further guidance, but the Treasury Depart-
ment and the IRS will continue to monitor
the elective payment process to determine
whether there are areas in which more
efficiencies can be created.
B. Tribal organizations
One commenter noted that wholly
owned Tribal corporations appear to be
incapable of making an election under
section 761(a) because such entities are
corporations for Federal tax purposes.
The treatment of entities wholly owned by
Tribal governments is addressed by a sep-
arate rulemaking and is therefore outside
the scope of these final regulations. For
information on how to provide comments
in response to that separate rulemaking,
see the notice of proposed rulemaking
(REG-113628-21), Entities Wholly Owned
by Indian Tribal Governments, published
in the Federal Register (89 FR 81871) on
October 9, 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.
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
information from the public, whether such
collection of information is mandatory,
voluntary, or required to obtain or retain
a benefit. 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 dis-
plays a valid control number.
These final regulations mention report-
ing and recordkeeping requirements that
must be satisfied for unincorporated orga-
nizations to elect out of subchapter K.
These collections of information are gen-
erally used by the IRS for tax compliance
purposes and by taxpayers to facilitate
proper reporting and recordkeeping. The
likely respondents to these collections are
businesses and tax-exempt organizations.
Unincorporated entities meeting the
requirements outlined in §1.761-2(a)(4)
of these final regulations satisfy relevant
reporting requirements by submitting a
statement attached to, or incorporated in,
a properly executed partnership return,
Form 1065, U.S. Return of Partnership
Income, containing, in lieu of the infor-
mation required by Form 1065 and by the
instructions relating thereto, only the name
or other identification and the address
of the organization together with infor-
mation on the return, or in the statement
attached to the return, showing the names,
addresses, and identification numbers of all
the members of the organization; a state-
ment that the organization qualifies under
§1.761-2(a)(1) and either §1.761-2(a)(2)
or (3); a statement that all of the members

December 9, 2024 1216 Bulletin No. 2024–50
of the organization elect that it be excluded
from all of subchapter K; and a statement
indicating where a copy of the agreement
under which the organization operates is
available (or if the agreement is oral, from
whom the provisions of the agreement
may be obtained). These requirements and
associated forms are already approved by
OMB under 1545-0123 for business filers.
These final regulations are not changing or
creating new collection requirements not
already approved by OMB.
The recordkeeping requirements
mentioned in these final regulations are
considered general tax records under
§1.6001-1(e). These records are required
for the IRS to validate that electing tax-
payers have consistently met the regula-
tory requirements outlined in §1.761-2.
For PRA purposes, general tax records are
already approved by OMB under 1545-
0123 for business filers and 1545-0047 for
tax-exempt organizations.
III. Regulatory Flexibility Act
The Secretary of the Treasury hereby
certifies that the final regulations will not
have a significant economic impact on a
substantial number of small entities pur-
suant to the Regulatory Flexibility Act (5
U.S.C. chapter 6).
These final regulations would affect
unincorporated organizations that elect
out of subchapter K in connection with an
election under section 6417, as well as the
members of such organizations.
Data is not readily available about these
organizations. Such organizations could
not have made an election out of subchap-
ter K under the preexisting regulations, so
information about existing organizations
that have made section 761(a) elections is
not instructive.
Even if these final regulations affect a
substantial number of small entities, such
impact will not be significant. The final
regulations do not make it more costly to
make or maintain an election under sec-
tion 761(a).
These final regulations do not change
the procedural requirements under
§1.761-2(b) for making an election under
section 761(a). Other than to conform to
modern formatting conventions, the final
regulations would amend §1.761-2(b)
only by adding a parenthetical to clarify
that in making a valid section 761 elec-
tion, which requires attaching certain
statements to a Form 1065 as required
in accordance with the preexisting regu-
lations, §1.761-2(a)(4) should be taken
into account, as applicable, with regard
to the required statement that the organi-
zation qualifies under §1.761-2(a)(1) and
either §1.761-2(a)(2) or (3) “(taking into
account §1.761-2(a)(4), as applicable)”.
Otherwise, an unincorporated organiza-
tion making an election under these final
regulations would not be required to sub-
mit anything additional or different than
required under the preexisting version of
§1.761-2(b).
These final regulations impose no new
ongoing compliance costs. Though any
unincorporated organization that has made
an election under section 761(a) should
ensure that it remains qualified under
§1.761-2(a)(1) and either §1.761-2(a)(2)
or (3) (taking into account §1.761-2(a)
(4), as applicable), the final regulations
do not add to this obligation. In fact, these
final regulations could make it simpler
for certain unincorporated organizations
to stay qualified, given their joint operat-
ing agreements that satisfy the modified
co-ownership and severance requirements
and multi-year contracts that satisfy the
modified joint marketing requirement.
For the reasons stated, a regulatory
flexibility analysis under the Regulatory
Flexibility Act is not required.
Pursuant to section 7805(f), the notice
of proposed rulemaking preceding these
regulations was submitted to the Chief
Counsel for the Office of Advocacy of the
Small Business Administration for com-
ment on its impact on small business, and
no comments were received.
IV. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandate
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 (updated
annually for inflation). These final regula-
tions do not include any Federal mandate
that may result in expenditures by State,
local, or Tribal governments or by the pri-
vate sector in excess of that threshold.
V. Executive Order 13132: Federalism
Executive Order 13132 (Federalism)
prohibits an agency from publishing any
rule that has federalism implications if
the rule either imposes substantial, direct
compliance costs on State and local gov-
ernments, and is not required by statute,
or preempts State law, unless the agency
meets the consultation and funding
requirements of section 6 of the Executive
order. These final regulations do not have
federalism implications and do not impose
substantial, direct compliance costs on
State and local governments or preempt
State law within the meaning of the Exec-
utive order.
VI. Executive Order 13175: Consultation
and Coordination With Indian Tribal
Governments
Executive Order 13175 (Consultation
and Coordination With Indian Tribal Gov-
ernments) prohibits an agency from pub-
lishing any rule that has Tribal implica-
tions if the rule either imposes substantial
direct compliance costs on Indian Tribal
governments, and is not required by stat-
ute, or preempts Tribal law, unless the
agency meets the consultation and fund-
ing requirements of section 5 of the Exec-
utive order. These final rules do not have
substantial direct effects on one or more
federally recognized Indian tribes and do
not impose substantial direct compliance
costs on Indian Tribal governments within
the meaning of the Executive order.
Nevertheless, on April 5, 2024, the
Treasury Department and the IRS held a
consultation with Tribal leaders requesting
assistance in addressing questions related
to the section 761(a) proposed rules pub-
lished on March 11, 2024, which informed
the development of these final regulations.
VII. Executive Order 14112: Reforming
Federal Funding and Support for Tribal
Nations To Better Embrace Our Trust
Responsibilities and Promote the Next
Era of Tribal Self-Determination
Executive Order 14112 (Reforming
Federal Funding and Support for Tribal

Bulletin No. 2024–50 1217 December 9, 2024
Nations to Better Embrace Our Trust
Responsibilities and Promote the Next Era
of Tribal Self-Determination) reaffirms
the executive branch’s support for Tribal
self-determination as the most effective
policy for the economic growth of Tribal
Nations and the economic well-being of
Tribal citizens. Executive Order 14112
requires agency heads to take certain
actions, consistent with applicable law
and to the extent practicable, to increase
access to “Federal funding and support
programs for Tribal Nations”; provide
Tribal Nations with the flexibility to
improve economic growth and address
the specific needs of their communities;
and reduce administrative burdens. Sec-
tion 2(b) of the Executive order defines
“Federal funding and support programs
for Tribal Nations” as including “fund-
ing, programs, technical assistance, loans,
grants, or other financial support or direct
services that the Federal Government pro-
vides to Tribal Nations or Indians because
of their status as Indians.” As section 1
of the Executive order explains, “As we
continue to support Tribal Nations, we
must respect their sovereignty by better
ensuring that they are able to make their
own decisions about where and how to
meet the needs of their communities. No
less than for any other sovereign, Tribal
self-governance is about the fundamental
right of a people to determine their own
destiny and to prosper and flourish on their
own terms.” These commitments build on
a recognition of principles of sovereignty,
sovereign immunity, and self-governance
that have been repeatedly reaffirmed by
the Supreme Court. See, e.g., Three Affil-
iated Tribes of the Fort Berthold Reser-
vation v. Wold Engineering, P.C., et al.,
476 U.S. 877, 890-91 (1986); Oklahoma
Tax Comm’n v. Citizen Band Potawatomi
Indian Tribe of Oklahoma, 498 U.S. 505,
510 (1991). The Treasury Tribal Advi-
sory Committee has advised that Tribes
consider “financial support” in Executive
Order 14112 to include tax matters that
range from tax credits to Federal tax rules
that regulate Tribal revenue.
Consistent with Executive Order
14112, the Treasury Department and the
IRS recognize the importance of protect-
ing and supporting Tribal sovereignty and
self-determination. These final regulations
would further Tribal self-determination
and self-governance and reduce admin-
istrative burdens by providing Tribes the
ability to directly make section 6417 elec-
tions for applicable credit property held
through applicable unincorporated orga-
nizations provided all applicable statutory
and regulatory requirements are satisfied.
VIII. Congressional Review Act
Pursuant to the Congressional Review
Act (5 U.S.C. 801 et seq.), the Office of
Information and Regulatory Affairs has
designated this rule as a “major rule,” as
defined by 5 U.S.C. 804(2).
Statement of Availability of IRS
Documents
IRS notices and other guidance cited in
this preamble are published in the Internal
Revenue Bulletin (or Cumulative Bulletin)
and are available from the Superintendent
of Documents, U.S. Government Publish-
ing Office, Washington, DC 20402, or by
visiting the IRS website at https://www.
irs.gov.
Drafting Information
The principal author of these final reg-
ulations is Cameron Williamson. How-
ever, other personnel from the Treasury
Department and the IRS participated in
their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and record-
keeping requirements.
Amendments to the Regulations
Accordingly, the Treasury Department
and the IRS amend 26 CFR part 1 as fol-
lows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 is amended by revising the entry
for §1.761-2 to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
* * * * *
Section 1.761-2 also issued under 26
U.S.C. 446(b), 761(a), 6031(a), 6417(d),
and 6417(h).
* * * * *
Par. 2. Section 1.761-2 is amended by:
a. Revising and republishing para-
graphs (a)(1), (a)(2)(i), and (a)(3)(i);
b. Adding paragraphs (a)(4) and (5);
c. Revising and republishing para-
graphs (b)(1) and (2), (b)(3)(i), (c), and
(e); and
d. Adding paragraph (f).
The revisions and additions read as fol-
lows:
§1.761-2 Exclusion of certain
unincorporated organizations from the
application of all or part of subchapter
K of chapter 1 of the Internal Revenue
Code.
(a) * * *
(1) In general. Under the conditions
set forth in this section, an unincorpo-
rated organization described in paragraph
(a)(2) or (3) of this section (taking into
account paragraph (a)(4) of this section,
as applicable) may be excluded from the
application of all or a part of the provi-
sions of subchapter K of chapter 1 of
the Internal Revenue Code (subchapter
K). Such organization must be availed
of for investment purposes only and not
for the active conduct of a business, or
for the joint production, extraction, or
use of property, but not for the purpose
of selling services or property produced
or extracted. The members of such orga-
nization must be able to compute their
income without the necessity of com-
puting partnership taxable income. Any
syndicate, group, pool, or joint venture
which is treated as a corporation for Fed-
eral tax purposes does not fall within the
provisions in this paragraph (a)(1).
(2) * * *
(i) Own the property as co-owners;
* * * * *
(3) * * *
(i) Own the property as co-owners,
either in fee or under lease or other form
of contract granting exclusive operating
rights; and
* * * * *
(4) Modifications for certain joint own-
ership arrangements of applicable credit
property—(i) Scope. Paragraph (a)(4)(iii)
of this section provides certain modifica-
tions to specified rules in paragraph (a)(3)
of this section in the case of an applicable

December 9, 2024 1218 Bulletin No. 2024–50
unincorporated organization meeting the
requirements of paragraph (a)(4)(ii) of
this section.
(ii) Applicable unincorporated orga-
nization. For purposes of this section, an
applicable unincorporated organization is
an unincorporated organization:
(A) That is owned, in whole or in
part, by one or more applicable entities,
as defined in section 6417(d)(1)(A) and
§1.6417-1(c);
(B) The members of which enter into
a joint operating agreement in which the
members reserve the right separately
to take in kind or dispose of their pro
rata shares of any property produced,
extracted, or used, and any associated
renewable energy credits or similar cred-
its;
(C) That, pursuant to the joint operat-
ing agreement, is organized exclusively to
own and operate applicable credit prop-
erty (as defined in §1.6417-1(e));
(D) For which one or more of the
applicable entities will make an elective
payment election under section 6417(a)
for the applicable credits determined with
respect to its share of the applicable credit
property;
(E) The members of which are able to
compute their income without the neces-
sity of computing partnership taxable
income; and
(F) Which is not a syndicate, group,
pool, or joint venture which is classifiable
as an association, or any group operat-
ing under an agreement which creates an
organization classifiable as an association.
(iii) Specified modifications for appli-
cable unincorporated organizations.
Solely for purposes of an election under
section 761(a) by an applicable unin-
corporated organization that meets the
requirements of paragraphs (b) and (e) of
this section:
(A) The requirement in paragraph (a)
(3)(i) of this section is modified such that
the participants are permitted to own the
applicable credit property through an
unincorporated organization that is an
entity, other than one that is treated as a
corporation for Federal tax purposes; and
(B) The requirement in paragraph (a)
(3)(iii) of this section is modified such
that the delegation of authority to sell the
participant’s share of the property pro-
duced or used may allow the delegee to
enter into contracts the duration of which
exceeds the minimum needs of the indus-
try and may be for more than one year,
provided that the delegation of authority
to act on behalf of the participant may not
be for a period of time that exceeds the
minimum needs of the industry, and in no
event for more than one year.
(5) Examples. The following examples
are intended to illustrate the principles of
this section.
(i) Example 1—(A) Facts. G and H enter into
a joint operating agreement to own and operate a
facility that will produce solar energy. G, an appli-
cable entity, is entitled under the joint operating
agreement to take in kind or dispose of 40% of
the energy produced by the unincorporated orga-
nization and H, which is not an applicable entity,
is entitled to the remaining 60%. G and H form
LLC, a limited liability company, to hold the solar
energy property that G and H intend to operate
pursuant to the joint operating agreement. In accor-
dance with the joint operating agreement, G owns
a 40% ownership interest in LLC and H owns the
remaining 60% ownership interest. G will sell its
share of energy produced by the facility in a manner
designed to generate applicable credits under sec-
tion 45(a) and will make an election under section
6417(a) with respect thereto. LLC makes a valid
election under section 761(a) to be excluded from
subchapter K.
(B) Analysis. G will be entitled to any credits
under section 45(a) generated by its sale of energy
produced by LLC that G has the right to take in
kind or dispose of (which, under the joint operating
agreement, is 40% of the energy produced by LLC).
Assuming all other requirements are met, G will be
able to make an elective payment election under sec-
tion 6417 for the applicable credits determined with
respect to its ownership share of the solar energy
property.
(ii) Example 2—(A) Facts. T is an Indian Tribal
government as defined in §1.6417-1(c) and an appli-
cable entity. Through a limited liability company
organized under T’s Tribal law (TLLC), T and Y own
and operate applicable credit property that will gen-
erate electricity the sale of which will generate appli-
cable credits under section 45(a). TLLC is not treated
as an association taxable as a corporation for Federal
tax purposes and no election under §301.7701-3 of
this chapter has been made to treat TLLC as such.
T and Y enter into a joint operating agreement with
respect to the ownership and operation of the applica-
ble credit property in which each of T and Y reserve
the right separately to take in kind or dispose of their
pro rata shares of property produced, extracted, or
used and any associated renewable energy credits
or similar credits. TLLC is formed exclusively to
own and operate an applicable credit property with
respect to which section 45(a) credits will be deter-
mined. On January 1st of year 1, T and Y enter into
delegation agreements with Q that delegate T’s and
Y’s authority to Q to sell the electricity generated
by T’s and Y’s shares of the applicable credit prop-
erty. The term of the delegation agreements is one
year, which does not exceed the minimum needs of
the industry. On June 1st of year 1, Q enters into a
power purchase agreement with Utility on T’s and
Y’s behalf that commits T and Y to sell the electricity
produced from their shares of the applicable credit
property to Utility for a term of 15 years. At the end
of the day on December 31st of year 1, the delegation
agreements terminate.
(B) Analysis. Because T and Y did not delegate
authority for a period of more than one year to sell
the output from their shares of the applicable credit
property, the requirements of paragraph (a)(3)(iii)
of this section (as modified by paragraph (a)(4)(iii)
(B) of this section) are met. Assuming that TLLC
otherwise qualifies as an applicable unincorporated
organization, TLLC is an organization described in
paragraph (a)(4)(iii)(A) of this section and can make
an election under paragraphs (b) and (e) of this sec-
tion to be excluded from the application of all of sub-
chapter K under section 761(a). As such, T can make
an elective payment election for the applicable cred-
its determined with respect to its share of the appli-
cable credit property held by TLLC, assuming the
requirements of section 6417 are otherwise met. The
analysis in this example would be the same whether
Y is also an Indian Tribal government, another appli-
cable entity, or some other person.
(iii) Example 3—(A) Facts. The facts are the
same as in paragraph (a)(5)(ii)(A) of this section
(Example 2), except that at the end of the day on
December 31, T and Y each agree, in writing, to a
new agent delegation agreement with Q with sub-
stantively identical terms as the agent delegation
agreement in effect during year 1.
(B) Analysis. Because each of T and Y have
agreed, in writing, to engage Q in an agency rela-
tionship lasting no longer than one year, the results
are the same as in paragraph (a)(5)(ii)(B) of this
section (Example 2). In contrast, if the agent delega-
tion agreement renewed automatically, T and Y have
effectively entered into an agent delegation agree-
ment lasting longer than one year and have violated
the requirements of paragraph (a)(4)(iii)(B) of this
section. In that case, TLLC would not be eligible to
make or maintain an election under section 761(a).
As such, T could not make an elective payment
election for the applicable credits determined with
respect to its share of the applicable credit property
held through TLLC.
(b) * * *
(1) Time for making election for exclu-
sion. Any unincorporated organization
described in paragraph (a)(1) of this sec-
tion and either paragraph (a)(2) or (3) of
this section (taking into account para-
graph (a)(4) of this section, as applica-
ble) that wishes to be excluded from all
of subchapter K must make the election
provided in section 761(a) not later than
the time prescribed by §1.6031(a)–1(e)
(including extensions thereof) for filing
the partnership return for the first tax-

Bulletin No. 2024–50 1219 December 9, 2024
able year for which exclusion from sub-
chapter K is desired. Notwithstanding the
prior sentence, such organization may be
deemed to have made the election in the
manner prescribed in paragraph (b)(2)(ii)
of this section.
(2) Method of making election—(i) In
general. Except as provided in paragraph
(b)(2)(ii) of this section, any unincor-
porated organization described in para-
graph (a)(1) of this section and either
paragraph (a)(2) or (3) of this section
(taking into account paragraph (a)(4) of
this section, as applicable) which wishes
to be excluded from all of subchapter K
must make the election provided in sec-
tion 761(a) in a statement attached to,
or incorporated in, a properly executed
partnership return, Form 1065, U.S.
Return of Partnership Income, which
must contain the information required in
this paragraph (b)(2)(i). Such return must
be filed with the Internal Revenue Ser-
vice Center where the partnership return,
Form 1065, would be required to be filed
if no election were made. To determine
the appropriate Internal Revenue Service
Center, the principal office or place of
business of the person filing the return
will be considered the principal office or
place of business of the organization. The
partnership return must be filed not later
than the time prescribed §1.6031(a)–1(e)
(including extensions thereof) for filing
the partnership return with respect to the
first taxable year for which exclusion
from subchapter K is desired. Such part-
nership return must contain, in lieu of the
information required by Form 1065 and
by the instructions relating thereto, only
the name or other identification and the
address of the organization together with
information on the return, or in the state-
ment attached to the return, showing the
names, addresses, and taxpayer identifi-
cation numbers of all the members of the
organization; a statement that the organi-
zation qualifies under paragraph (a)(1) of
this section and either paragraph (a)(2)
or (3) of this section (taking into account
paragraph (a)(4) of this section, as appli-
cable); a statement that all of the mem-
bers of the organization elect that it be
excluded from all of subchapter K; and a
statement indicating where a copy of the
agreement under which the organization
operates is available (or if the agreement
is oral, from whom the provisions of the
agreement may be obtained).
(ii) Deemed election rule. If an
unincorporated organization described
in paragraph (a)(1) of this section and
either paragraph (a)(2) or (3) of this sec-
tion (taking into account paragraph (a)
(4) of this section, as applicable) does
not make the election provided in sec-
tion 761(a) in the manner prescribed
by paragraph (b)(2)(i) of this section,
it will nevertheless be deemed to have
made the election if it can be shown
from all the surrounding facts and cir-
cumstances that it was the intention of
the members of such organization at the
time of its formation to secure exclusion
from all of subchapter K beginning with
the first taxable year of the organization.
Although the following facts are not
exclusive, either one of such facts may
indicate the requisite intent:
(A) At the time of the formation of
the organization there is an agreement
among the members that the organization
be excluded from subchapter K beginning
with the first taxable year of the organiza-
tion; or
(B) The members of the organization
owning substantially all of the capital
interests report their respective shares of
the items of income, deductions, and cred-
its of the organization on their respective
returns (making such elections as to indi-
vidual items as may be appropriate) in a
manner consistent with the exclusion of
the organization from subchapter K begin-
ning with the first taxable year of the orga-
nization.
(3) * * *
(i) In general. An election under this
section to be excluded will be effective
unless within 90 days after the forma-
tion of the organization any member of
the organization notifies the Commis-
sioner that the member desires subchap-
ter K to apply to such organization, and
also advises the Commissioner that the
member has so notified all other mem-
bers of the organization by registered or
certified mail. Such election is irrevoca-
ble as long as the organization remains
qualified under paragraph (a)(1) of this
section and either paragraph (a)(2) or
(3) of this section (taking into account
paragraph (a)(4) of this section, as
applicable), or unless approval of revo-
cation of the election is secured from the
Commissioner.
* * * * *
(c) Partial exclusion from subchap-
ter K. An unincorporated organization
which wishes to be excluded from only
certain sections of subchapter K must
submit to the Commissioner, no later
than 90 days after the beginning of the
first taxable year for which partial exclu-
sion is desired, a request for permission
to be excluded from certain provisions of
subchapter K. The request must set forth
the sections of subchapter K from which
exclusion is sought and must state that
such organization qualifies under para-
graph (a)(1) of this section and either
paragraph (a)(2) or (3) of this section
(taking into account paragraph (a)(4) of
this section, as applicable), and that the
members of the organization elect to be
excluded to the extent indicated. Such
exclusion will be effective only upon
approval of the election by the Commis-
sioner and subject to the conditions the
Commissioner may impose.
* * * * *
(e) Cross reference. For requirements
with respect to the filing of a return
on Form 1065 by a partnership, see
§1.6031(a)–1.
(f) Applicability date. Except as pro-
vided in paragraph (d) of this section, this
section applies to taxable years ending on
or after March 11, 2024.
Heather C. Maloy,
Acting Deputy Commissioner.
Approved: November 6, 2024.
Aviva R. Aron-Dine,
Deputy Assistant Secretary of
the Treasury (Tax Policy).
(Filed by the Office of the Federal Register Novem-
ber 19, 2024, 8:45 a.m., and published in the issue
of the Federal Register for November 20, 2024, 89
FR 91552)

December 9, 2024 1220 Bulletin No. 2024–50
26 CFR 301.6103(j)(1)-1 Disclosures of return infor-
mation reflected on returns to officers and employees
of the Department of Commerce for certain statis-
tical ...
T.D. 10013
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 301
Disclosures of Return
Information Reflected
on Returns to Officers
and Employees of the
Department of Commerce,
including the Bureau of
the Census, for Certain
Statistical Purposes and
Related Activities
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations.
SUMMARY: This document contains
final regulations that amend existing
regulations relating to the disclosure
of specified return information to the
Bureau of the Census (Bureau). The
final regulations ensure the efficient and
appropriate transfer of return information
to the Bureau and permit the disclosure
of additional return information pursu-
ant to a request from the Secretary of
Commerce. These regulations require no
action by taxpayers and have no effect on
their tax liabilities.
DATES: Effective date: These final reg-
ulations are effective on November 26,
2024.
Applicability date: For the date of applica-
bility, see §301.6103(j)(1)-1.
FOR FURTHER INFORMATION
CONTACT: Elizabeth Erickson of the
Office of the Associate Chief Counsel
(Procedure and Administration), at (202)
317-6834; (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Authority
This document amends the Procedure
and Administration Regulations, 26 CFR
part 301, relating to section 6103(j)(1)
(A) of the Internal Revenue Code (Code),
by adding final regulations under section
6103 (final regulations). Section 6103(j)
(1) provides an express delegation of
authority to the Secretary of the Treasury
or her delegate (Secretary), stating that,
“[u]pon request in writing by the Secre-
tary of Commerce, the Secretary shall
furnish . . . such returns, or return infor-
mation reflected thereon, to officers and
employees of the Bureau of the Census”
and “such return information reflected
on returns of corporations to officers and
employees of the Bureau of Economic
Analysis” “as the Secretary may prescribe
by regulation for the purpose of, but only to
the extent necessary in, the structuring of
censuses and national economic accounts
and conducting related statistical activities
authorized by law.” Section 6103(q) fur-
ther authorizes the Secretary to “prescribe
such other regulations as are necessary to
carry out the provisions of” section 6103.
The final regulations are also issued under
the express delegation of authority under
section 7805(a) of the Code.
Background
There is a long history of providing
return information to the Bureau under
section 6103(j)(1)(A), and the regula-
tions promulgated under this section have
been amended periodically to increase the
amount of return information provided to
facilitate the statistical activities of the
Bureau. See e.g., TD 9037, 68 FR 2693,
January 21, 2003; TD 9188, 70 FR 12141,
March 11, 2005; TD 9267, 71 FR 38263,
July 6, 2006; TD 9372, 72 FR 73262,
December 27, 2007; TD 9439, 73 FR
79361, December 29, 2008; TD 9500, 75
FR 52459, August 26, 2010; TD 9631, 78
FR 52857, August 27, 2013; TD 9754, 81
FR 9767, February 26, 2016; TD 9856, 84
FR 14011, April 9, 2019.
The existing regulations under sec-
tion 6103(j)(1)(A) are set forth in 26
CFR 301.6103(j)(1)-1. They authorize
the Bureau to receive return information
that supports many different Bureau proj-
ects and programs, including the Eco-
nomic Census, the Longitudinal Employ-
er-Household Dynamics program, and the
Small Area Income and Poverty Estimates
program, among others.
Pursuant to section 6103(p)(4), the
IRS sets stringent privacy and security
requirements for agencies receiving return
information, including the Bureau. These
requirements are currently detailed in IRS
Publication 1075, Tax Information Secu-
rity Guidelines For Federal, State and
Local Agencies. See also §301.6103(p)
(4)-1.
By letter dated February 29, 2024, the
Secretary of Commerce requested the
Secretary amend existing §301.6103(j)
(1)-1 to provide for the disclosure of addi-
tional items of return information to the
Bureau to enable the Bureau to perform
mission critical statistical functions. The
Secretary of Commerce further stated
that the additional items would allow the
Bureau to conduct its economic, demo-
graphic, decennial, and research statis-
tics programs, censuses, and related pro-
gram evaluations. The amendments to
the existing regulations would permit the
Bureau to publish statistical information,
enhance the use of administrative records,
improve the quality of program estimates,
and support the reduction of burden. The
Secretary of Commerce’s letter lists the
additional items of return information
requested based on the Bureau’s specific
need for each item of information.
On March 29, 2024, a notice of pro-
posed rulemaking (REG-123376-22) was
published in the Federal Register (89 FR
22101) (proposed regulations). The pro-
posed regulations proposed amending the
regulations that authorize disclosure of
specified return information to the Bureau.
The proposed regulations would allow the
disclosure of additional items of return
information requested by the Secretary of
Commerce to enable the Bureau to per-
form mission critical statistical functions.
The proposed regulations would also per-
mit the disclosure of return information
if an item of return information currently
listed in the regulations is subsequently
reported in a substantially similar format
or on a substantially similar document.
The proposed regulations would for-
malize existing practice to include (1) the

Bulletin No. 2024–50 1221 December 9, 2024
requirement that all projects that use return
information disclosed under these regu-
lations be approved by the IRS Director
of Statistics of Income, and (2) language
related to the IRS’s and the Bureau’s dis-
closure review obligations.
Summary of Comments and
Explanation of Revisions
The Department of the Treasury (Trea-
sury Department) and the IRS received
eighteen comments in response to the
proposed regulations. The comments are
available for public inspection at https://
www.regulations.gov or upon request.
There was no request for a public hearing,
and none was held. After full consider-
ation of the comments received, which are
described in this Summary of Comments
and Explanation of Revisions, these final
regulations adopt the proposed regulations
with minor changes.
A. Comments Supporting the Proposed
Regulations.
Nine of the comments received did not
seek to modify the items of return infor-
mation permitted to be disclosed to the
Bureau pursuant to the proposed regula-
tions. Of these comments, six were sup-
portive of the proposed regulations. One
comment noted the importance of admin-
istrative tax data in measuring and under-
standing income and wealth in the United
States. Another comment noted that the
proposed regulations would improve the
Bureau’s ability to accurately estimate
household income and otherwise evaluate
and improve the Bureau’s statistical prod-
ucts. This same comment also encouraged
the IRS and the Bureau, along with the
Office of Management and Budget and
other statistical agencies, to explore addi-
tional pathways for increasing the statisti-
cal agencies’ access to Federal tax data, as
well as a greater sharing of administrative
data across statistical agencies, noting that
increased use of administrative data has
significant promise for improving statis-
tics on U.S. households and businesses.
Finally, this comment noted its support for
further consideration of possible means of
expanding access to tax data for appropri-
ate purposes in a reliably secure and con-
fidential way.
Another comment supported the pro-
posed regulations and stated that the data
that could be disclosed as outlined in the
proposed regulations was crucial for the
IRS’s efforts to advance equity. As one
example, this comment noted that, if
finalized, the proposed regulations would
provide an important opportunity for gov-
ernment and independent researchers to
understand demographic trends regard-
ing the Child Tax Credit (CTC) and other
refundable credits, as well as to iden-
tify and track potential disparities in tax
administration. Another comment noted
that the proposed changes to the existing
regulations would enable the Bureau to
produce data that provides more detail
about the economic conditions of vari-
ous populations across the United States,
including populations that have been his-
torically underserved, marginalized, and
adversely affected by health inequity.
These comments reflect support for
the proposed regulations’ items of return
information permitted to be disclosed to
the Bureau. The Treasury Department and
IRS agree that disclosure of this informa-
tion will further the needs of the Bureau by
authorizing the Bureau to receive return
information that supports many different
Bureau projects and programs, including
the Economic Census, the Longitudinal
Employer-Household Dynamics program,
and the Small Area Income and Poverty
Estimates program, among others.
B. Comments Proposing that Additional
Items of Return Information be Disclosed
to the Bureau.
Two comments suggested that addi-
tional information on the variety of energy
credits under the Inflation Reduction Act
of 2022 (IRA) be furnished to the Bureau.
The IRA, Public Law 117-169, 136 Stat.
1818 (August 16, 2022), featured a signif-
icant number of new tax provisions related
to clean energy. Section 6103(j)(1)(A)
provides that the Secretary “shall furnish”
returns or return information requested
by the Secretary of Commerce “for the
purpose of, but only to the extent neces-
sary in, the structuring of the censuses
and national economic accounts and con-
ducting related statistical activities autho-
rized by law.” In her request to the Secre-
tary, the Secretary of Commerce did not
request the furnishing of the return infor-
mation recommended by the comments.
Because the Secretary of Commerce did
not request that information, the final reg-
ulations do not adopt these comments.
Similarly, two other comments rec-
ommended that additional data regarding
partnership returns be furnished to the
Bureau – specifically, the zip code of part-
ners included on Form 1065, U.S. Return
of Partnership Income, Schedule K-1. The
Secretary of Commerce in her request to
the Secretary did not request the return
information recommended by the com-
ments. Accordingly, the final regulations
do not adopt these comments.
One comment suggested that it is
important for the Bureau to have access
to the series of Forms 1099 for both filers
and non-filers because such information is
important for measuring and understand-
ing income and its distribution, and that
the accuracy of income estimates would
improve. The comment in particular iden-
tified Forms 1099-INT, Interest Income,
and 1099-DIV, Dividends and Distribu-
tions, along with certain data from Form
1098-T, Tuition Statement (identifiers of
the college attended, and tuition amount).
The Secretary of Commerce in her request
to the Secretary did not request the dis-
closure of the Form 1099 series in gen-
eral or the Forms 1099-INT or 1099-DIV
specifically. The proposed regulations
would permit the disclosure of payments
received for qualified tuition and related
expenses as well as the identity of the eli-
gible educational institution filing Form
1098-T. Accordingly, no change to the
final regulations is necessary to adopt
these comments.
Two other comments requested that
payer and payee taxpayer identification
numbers (TINs) from information returns
be disclosed to the Bureau. Payer and
payee TINs may already be disclosed to
the Bureau under the existing regulations.
See §§301.6103(j)(1)-1(b)(1) (relating to
individual taxpayers); 301.6103(j)(1)-1(b)
(2)(i) (relating to taxpayers engaged in a
trade or business); 301.6103(j)(1)-1(b)
(3) (relating to business-related return
information); and 301.6103(j)(1)-1(b)(4)
(relating to tax-exempt organizations).
The proposed regulations similarly pro-
vide for the ability to disclose payer and
payee TINs. See proposed §§301.6103(j)

December 9, 2024 1222 Bulletin No. 2024–50
(1)-1(b)(1)(i)(A) (relating to individ-
ual taxpayers); 301.6103(j)(1)-1(b)(1)
(ii) (relating to returns filed on behalf of
a trade or business); 301.6103(j)(1)-1(b)
(1)(iii) (relating to tax-exempt organiza-
tions). Accordingly, no change to the final
regulations is necessary to adopt these
comments.
A comment supported the language
in the proposed regulations that would
provide the Bureau with information on
health coverage (such as marketplace
coverage parameters, and employer cov-
erage on Forms 1095-A, Health Insur-
ance Marketplace Statement, 1095-B,
Health Coverage, and 1095-C, Employ-
er-Provided Health Insurance Offer
and Coverage) noting that the informa-
tion reported on these forms provides a
comprehensive record of health cover-
age nationwide and fills important gaps
in data. The comment also noted that
information regarding health savings
accounts (HSAs) from Form 5498-SA,
HSA, Archer MSA, or Medicare Advan-
tage MSA Information, would also be
valuable to policymakers, as the policy
considerations with respect to HSAs are
a frequent and important focus of ongo-
ing research. The Treasury Department
and the IRS note that certain data from
Form 5498-SA are already included in
the information that would be permitted
to be disclosed to the Bureau under the
proposed regulations. The final regula-
tions in this regard adopt the proposed
regulations without modification.
This same comment requested that
the Bureau release (a) enhanced Annual
Social and Economic Supplement (ASEC)
of the Current Population Survey (CPS)
data with new IRS data matched to it, and
(b) detailed cross tabulations of newly
released tax data by income, geographic
area, filing type, and other available tax
return statistics. In addition, this comment
also encouraged the IRS to continue to
carefully evaluate technical and policy
solutions for safely sharing the various
blended data and implement data gover-
nance principles such as accessibility and
transparency, through the blending of IRS
and Bureau data.
This same comment suggested that
various data elements should be dis-
closed to the Bureau to allow the Bureau
to have a more accurate understanding of
the impact of current tax benefits and the
potential impact of modifications to these
provisions. The suggested data elements
included: tax-filing status, income from
various sources, the number of earned
income tax credit (EITC) eligible qual-
ifying children, the amount of tax cred-
its like EITC and the CTC that families
receive, and tax liabilities. Each of these
data elements may be disclosed either
directly or indirectly under the existing
regulations and also under the proposed
regulations. See proposed §§301.6103(j)
(1)-1(b)(1)(i) (reflecting returns and
return information related to individual
taxpayers); 301.6103(j)(1)-1(b)(1)(i)(B)
(regarding tax-filing status); 301.6103(j)
(1)-1(b)(1)(i)(O) (regarding earned
income as defined under section 32(c)(2));
301.6103(j)(1)-1(b)(1)(i)(GG) (regard-
ing the EITC); 301.6103(j)(1)-1(b)(1)(i)
(P) (regarding EITC-eligible qualifying
children); 301.6103(j)(1)-1(b)(1)(i)(PP)
(regarding the CTC). The overall tax lia-
bility of an individual taxpayer, which the
Treasury Department and IRS interpret to
mean the total amount of tax due or paid
by an individual taxpayer, may be ascer-
tained through the items of income, gain,
deduction, and credit, that may similarly
be disclosed under the proposed and final
regulations. Accordingly, the final regu-
lations adopt the proposed regulations in
this respect without modification.
C. Comments Expressing Concerns
Regarding Data Security.
One comment suggested that in its
finalized form, the proposed regulations
should state affirmatively that, in addi-
tion to IRS data privacy protections, data
are and will remain confidential under 13
U.S.C. 9, whether in their original form or
when comingled or linked.
The final regulations do not adopt this
recommendation. The provision cited in
the comment, 13 U.S.C. 9, governs the
protection and use of confidential data by
the Department of Commerce. Section
214 of title 13, United States Code gov-
erns criminal penalties against employees
or staff members of the Bureau for prohib-
ited disclosure of such confidential data.
The disclosures that would be permitted
by the proposed regulations concern dis-
closures made by the IRS under section
6103(j) of Title 26, United States Code
(Title 26). The proposed regulations, as
well as these final regulations, do not gov-
ern data privacy or confidentiality require-
ments outside of Title 26. The Secretary
of Commerce affirmed the application of
13 U.S.C. 9 and 214 in her February 29,
2024, request to the Secretary.
Two other comments expressed con-
cerns that the data sharing contemplated
by the proposed regulations would
weaken the confidentiality of personal tax
data held by the IRS, encourage the inap-
propriate release of personal tax infor-
mation, and increase the vulnerability of
individual tax return information to data
breaches, intrusion, data theft, and abuse.
The Treasury Department and the IRS
take taxpayer confidentiality seriously.
Section 6103(a) prohibits the unautho-
rized disclosure of tax returns and return
information by officers or employees of
the United States, which includes officers
or employees of the Treasury Department,
the IRS, the Department of Commerce,
and the Bureau. Unauthorized disclosure
of returns and return information, if will-
ful, is a felony. See section 7213 of the
Code. Unauthorized disclosure may also
be punishable through civil damages.
See section 7431 of the Code. Pursuant
to section 6103(p)(4), the IRS sets strin-
gent privacy and security requirements
for agencies receiving return information,
including the Bureau. See §301.6103(p)
(4)-1. Proposed §301.6103(j)(1)-1(d)
did not propose to modify the require-
ments set forth in section 6103(p)(4) and,
instead, noted their applicability, stating
that if the IRS determines that the Bureau
fails to satisfy those requirements, the IRS
may take action to ensure that the require-
ments are satisfied, “including suspension
of disclosures of return information” until
the IRS determines that the requirements
of section 6103(p)(4) have been, or will
be, satisfied.
No comments were received regard-
ing proposed §301.6103(j)(1)-1(d), and
accordingly, the final regulations adopt the
proposed regulation in this respect with-
out modification. The regulation ensures
that disclosures of returns and return
information are made consistent with the
requirements set forth in the Code and
regulations, and that the IRS may sus-
pend any disclosures to the Bureau should

Bulletin No. 2024–50 1223 December 9, 2024
either entity fail to satisfy the require-
ments under section 6103(p)(4).
D. Comments Expressing Concerns
about the Impacts of the Use of Data for
Certain Classes of Taxpayers.
One comment requesting that the pro-
posed regulations be withdrawn expressed
concerns that sharing additional tax data
with the Bureau would result in unintended
adverse consequences for immigrant com-
munities. Specifically, the comment noted
that additional data sharing could result in
a “chilling effect” for immigrant taxpay-
ers, suggesting that individuals may not
file tax returns because they are concerned
that their tax return data will be shared
with immigration enforcement agencies.
The comment also expressed a concern
that the proposed regulations could result
in the creation of a list of taxpayers who
file returns using Individual Taxpayer
Identification Numbers that could be
used to target individuals presumed to be
undocumented for immigration enforce-
ment purposes. The comment noted that
the IRS should continue to assure taxpay-
ers that their data is secure and that they
can safely file their taxes without being
concerned that their information will be
used for reasons beyond tax administra-
tion.
As discussed previously in this Sum-
mary of Comments and Explanation of
Revisions, return information that a tax-
payer provides to the IRS may not be
disclosed unless otherwise permitted by
Title 26, and unauthorized disclosures of
returns or return information may be sub-
ject to criminal and civil penalties. There
is no provision in the United States Code
that authorizes the disclosure or redisclo-
sure of returns or return information for
enforcement of immigration laws. Com-
ments regarding other possible lawful dis-
closures of taxpayer information are out-
side the scope of these regulations because
the proposed regulations relate to the dis-
closure of specified return information to
the Bureau, as permitted by law, and not to
any other agency, such as U.S. Immigra-
tion and Customs Enforcement or the U.S.
Department of Homeland Security.
Another comment requested that
the proposed regulations be withdrawn
because sharing such personal and
entity tax data encourages a racial and/
or gender diversity impact analysis of
tax policy decisions. The comment fur-
ther stated that such a racial or gender
diversity impact analysis is inappropriate
where no discriminatory intent has been
demonstrated and where tax provisions
have been introduced by Congress based
on independent considerations of tax
policy without any design or purpose to
create disproportionate racial or gender
impact. The Treasury Department and the
IRS do not adopt this comment. As previ-
ously described in this preamble, section
6103(j) states that the Secretary “shall
furnish” returns and return information,
upon the request of the Secretary of Com-
merce, to the Bureau “for the purpose of,
but only to the extent necessary in, the
structuring of censuses and national eco-
nomic accounts and conducting related
statistical activities authorized by law.”
These regulations provide for disclosure
to the Bureau that is fully consistent with
that statutory mandate.
E. Modification to Clarify “Taxpayer
Identity Information”.
No comments were received regarding
the definition of taxpayer identity infor-
mation. Proposed §301.6103(j)(1)-1(b)
(1)(i)(A) is the first instance of where that
term is used and includes the parenthetical
“(as defined under section 6103(b)(6) of
the Code).” Other references to taxpayer
identity information in the proposed reg-
ulations lack that parenthetical descriptor.
To provide consistency, the final regula-
tions modify the proposed regulations to
include that descriptor. See §§301.6103(j)
(1)-1(b)(1)(ii)(A) (regarding taxpayer
identity information of taxpayers engaged
in a trade or business); 301.6103(j)(1)-
1(b)(1)(ii)(P) (regarding taxpayer iden-
tity information of a parent corporation,
shareholder, partner, and employer iden-
tity information); 301.6103(j)(1)-1(b)(1)
(iii)(A) (regarding taxpayer identity infor-
mation of a tax-exempt organization);
301.6103(j)(1)-1(b)(3)(i)(A)(1) (regard-
ing taxpayer identity information reflected
on returns of corporations); 301.6103(j)
(1)-1(b)(3)(i)(B)(2) (regarding taxpayer
identity information from Form SS-4,
Application for Employer Identification
Number).
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. Regulatory Flexibility Act
Because these regulations would not
impose any requirements on small enti-
ties, the Regulatory Flexibility Act (5
U.S.C. chapter 6) does not apply. Pursuant
to section 7805(f) of the Internal Revenue
Code, the notice of proposed rulemaking
was submitted to the Chief Counsel for the
Office of Advocacy of the Small Business
Administration for comment on its impact
on small business. The Chief Counsel for
the Office of Advocacy of the Small Busi-
ness Administration did not provide any
written comments.
III. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates
Reform Act of 1995 (UMRA) requires
that agencies assess anticipated costs and
benefits and take certain other actions
before issuing a final rule that includes
any Federal mandate that may result in
expenditures in any one year by a State,
local, or Tribal government, in the aggre-
gate, or by the private sector, of $100 mil-
lion in 1995 dollars, updated annually for
inflation. In 2024, that threshold was $200
million. This rule does not include any
Federal mandate that may result in expen-
ditures by State, local, or Tribal govern-
ments, or by the private sector in excess of
that threshold.
IV. Executive Order 13132: Federalism
Executive Order 13132 (Federalism)
prohibits an agency from publishing any
rule that has federalism implications if
the rule either imposes substantial direct
compliance costs on State and local gov-
ernments, and is not required by statute,
or preempts State law, unless the agency

December 9, 2024 1224 Bulletin No. 2024–50
meets the consultation and funding
requirements of section 6 of the Execu-
tive order. These regulations do not have
federalism implications and do not impose
substantial direct compliance costs on
State and local governments or preempt
State law within the meaning of the Exec-
utive order.
V. Congressional Review Act
Pursuant to the Congressional Review
Act (5 U.S.C. 801 et seq.), the Office of
Information and Regulatory Affairs des-
ignated this rule as not a major rule, as
defined by 5 U.S.C. 804(2).
Drafting Information
The principal author of these regula-
tions is Elizabeth Erickson of the Office
of the Associate Chief Counsel (Procedure
and Administration). However, other per-
sonnel from the Treasury Department and
the IRS also participated in their develop-
ment.
List of Subjects in 26 CFR Part 301
Employment taxes, Estate taxes,
Excise taxes, Gift taxes, Income taxes,
Penalties, Reporting and recordkeeping
requirements.
Adoption of Amendments to the
Regulations
Accordingly, 26 CFR part 301 is
amended as follows:
PART 301–PROCEDURE AND
ADMINISTRATION
Paragraph 1. The authority citation
for part 301 is amended by revising the
entry for §301.6103(j)(1)-1 and removing
the entry for §301.6103(j)(1)-1T to read in
part as follows:
Authority: 26 U.S.C. 7805.
* * * * *
Section 301.6103(j)(1)-1 also issued
under 26 U.S.C. 6103(j)(1) and 6103(q).
* * * * *
Par 2. Section 301.6103(j)(1)-1 is
amended by adding a sentence to the end
of paragraph (a) and revising paragraphs
(b), (d), and (e) to read as follows:
§301.6103(j)(1)-1 Disclosures of
return information reflected on
returns to officers and employees of
the Department of Commerce for
certain statistical purposes and related
activities.
(a) * * * To the extent a particular form,
schedule, or other document filed with the
Internal Revenue Service is referenced in
this section, such information shall con-
tinue to be disclosable pursuant to this
section even if subsequently reported in a
substantially similar format or on a sub-
stantially similar document filed with the
Internal Revenue Service.
(b) Disclosure of return informa-
tion reflected on returns to officers and
employees of the Bureau of the Census.
(1) Officers or employees of the Internal
Revenue Service will disclose the follow-
ing return information reflected on returns
to officers and employees of the Bureau
of the Census for purposes of, but only to
the extent necessary in, the structuring of
censuses and national economic accounts
and conducting related statistical activities
authorized by law.
(i) With respect to returns filed by indi-
vidual taxpayers:
(A) Taxpayer identity information (as
defined in section 6103(b)(6) of the Inter-
nal Revenue Code (Code)), validity code
with respect to the taxpayer identifying
number (as described in section 6109 of
the Code), and taxpayer identity informa-
tion of spouse and dependents, if reported.
(B) Filing status.
(C) Number and classification of
reported exemptions.
(D) Wage and salary income.
(E) Dividend income.
(F) Interest income.
(G) Gross rent and royalty income.
(H) Total of—
(1) Wages, salaries, tips, etc.;
(2) Interest income;
(3) Dividend income;
(4) Alimony received;
(5) Business income;
(6) Pensions and annuities;
(7) Income from rents, royalties, part-
nerships, estates, trusts, etc.;
(8) Farm income;
(9) Unemployment compensation; and
(10) Total Social Security benefits.
(I) Adjusted gross income.
(J) Type of tax return filed.
(K) Entity code.
(L) Code indicators for Form 1040,
Form 1040 (Schedules A, C, D, E, F, and
SE), and Form 8814.
(M) Posting cycle date relative to fil-
ing.
(N) Social Security benefits.
(O) Earned income (as defined in sec-
tion 32(c)(2) of the Code).
(P) Number of Earned income cred-
it-eligible qualifying children.
(Q) Electronic filing system indicator.
(R) Return processing indicator.
(S) Paid preparer code.
(T) Dependent Social Security num-
bers.
(U) Total income.
(V) Ordinary dividends.
(W) Taxable refunds, credits, or offsets
of State and local income taxes.
(X) Business income or (loss).
(Y) Capital gain or (loss).
(Z) Other gains or (losses).
(AA) Individual Retirement Arrange-
ment (IRA) distributions.
(BB) Taxable amount of IRA distribu-
tions.
(CC) Pensions and annuities.
(DD) Taxable amount of pensions and
annuities.
(EE) Rental real estate, royalties, part-
nerships, S corporations, trusts, etc.
(FF) Farm income or (loss).
(GG) Earned income credit.
(HH) Taxable amount of Social Secu-
rity benefits.
(II) Other income.
(JJ) Itemized deductions.
(KK) Taxable income.
(LL) Tax.
(MM) Credit for child and dependent
care expenses.
(NN) Education credits.
(OO) Retirement savings contributions
credit.
(PP) Child tax credit.
(QQ) Nontaxable combat pay election.
(RR) Additional Child Tax Credit.
(SS) American Opportunity Tax Credit.
(TT) Medical and dental expenses.
(UU) State and local income taxes.
(VV) State and local general sales
taxes.
(WW) State and local personal prop-
erty taxes.
(XX) State and local real estate taxes.

Bulletin No. 2024–50 1225 December 9, 2024
(YY) Other taxes (amount).
(ZZ) Home mortgage interest and
points.
(AAA) Mortgage interest not on a
Form 1098.
(BBB) Points not on a Form 1098.
(CCC) Investment interest.
(DDD) Total gifts to charity, including
carryover from prior year.
(EEE) Casualty and theft losses.
(FFF) Total itemized deductions.
(GGG) Ordinary dividends.
(HHH) Qualified dividends.
(III) Tax-exempt interest.
(JJJ) Unemployment compensation.
(KKK) From Form 1098–
(1) Borrower taxpayer identification
number;
(2) Mortgage interest;
(3) Outstanding mortgage principal;
(4) Refund of overpaid interest;
(5) Mortgage insurance premiums;
(6) Points paid on purchase of principal
residence;
(7) Payee/payer/employee taxpayer
identification number;
(8) Payee/payer/employee name (first,
middle, last, suffix);
(9) Street address;
(10) City;
(11) State;
(12) Zip code (9 digit);
(13) Posting cycle week;
(14) Posting cycle year; and
(15) Document code.
(LLL) From Form 1098-E—Student
loan interest.
(MMM) From Form 1098-T–
(1) Payments received for qualified tui-
tion and related expenses;
(2) Scholarships or grants;
(3) Check box indicating that the
amount in box 1 or 2 includes amounts for
an academic period beginning in the fol-
lowing year;
(4) Check box indicating that student is
at least a half-time student; and
(5) Check box indicating that student is
a graduate student.
(NNN) From Form 5498–
(1) IRA contributions (other than
amounts in certain boxes);
(2) Rollover contributions;
(3) Roth IRA conversion amount;
(4) Fair market value of account;
(5) Checkboxes: IRA, Simplified
Employee Pension (SEP), Savings Incen-
tive Match Plan for Employees of Small
Employers (SIMPLE), Roth IRA;
(6) SEP contributions; and
(7) SIMPLE contributions.
(OOO) From Form SSA-1099/RRB-
1099–
(1) Net benefits;
(2) Address; and
(3) Trust fund description.
(PPP) From Form 1099-G—Unem-
ployment compensation.
(QQQ) From Form 1099-K–
(1) Filer name;
(2) Filer address;
(3) Filer taxpayer identification num-
ber;
(4) Payee taxpayer identification num-
ber;
(5) Payee name;
(6) Payee address;
(7) Gross payments;
(8) Card not present transactions;
(9) Merchant category code;
(10) Number of payment transactions;
and
(11) Payments by month.
(RRR) From Form 1099-MISC—Non-
employee compensation.
(SSS) From Form 1099-NEC—Non-
employee compensation.
(TTT) From Form 1099-Q–
(1) Gross distribution; and
(2) Plan type checkboxes.
(UUU) From Form 1099-R/RRB-
1099-R—
(1) Gross distribution;
(2) Distribution code(s); and
(3) Plan type checkboxes.
(VVV) From Form W-2–
(1) Employee’s Social Security num-
ber;
(2) Employer identification number;
(3) Employer’s name, address, and Zip
code;
(4) Employee’s name and address;
(5) Social Security tips;
(6) Medicare wages and tips;
(7) Box 12 codes and values; and
(8) Statutory employee, retirement
plan, and third-party sick pay checkboxes.
(WWW) From Form 1040, Schedule D–
(1) Net short-term capital gain/loss;
and
(2) Net long-term capital gain/loss.
(XXX) From Form 1040, Schedule E–
(1) Total rental real estate and royalty
income or (loss); and
(2) Total estate and trust income or
(loss).
(YYY) From Form 1040, Schedule F–
(1) Gross income;
(2) Total expenses;
(3) Net farm profit (or loss); and
(4) Gross income (accrual).
(ii) With respect to taxpayers filing a
return on behalf of a trade or business—
(A) The taxpayer name directory and
entity records consisting of taxpayer iden-
tity information (as defined in section
6103(b)(6) of the Code) with respect to
taxpayers engaged in a trade or business.
(B) The principal industrial activity
code.
(C) The filing requirement code.
(D) The employment code.
(E) The physical location.
(F) Monthly corrections of, and addi-
tions to, the information described in para-
graphs (b)(1)(ii)(A) through (E) of this
section.
(G) From Form SS–4, all information
reflected on such form.
(H) From an employment tax return—
(1) Taxpayer identifying number of the
employer;
(2) Total compensation reported;
(3) Master file tax account code (MFT);
(4) Taxable period covered by such
return;
(5) Employer code;
(6) Document locator number;
(7) Record code;
(8) Total number of individuals
employed in the taxable period covered
by the return;
(9) Total taxable wages paid for pur-
poses of chapter 21 of the Code;
(10) Total taxable tip income reported
for purposes of chapter 21 of the Code;
(11) If a business has closed or stopped
paying wages;
(12) Final date a business paid wages;
and
(13) If a business is a seasonal employer
and does not have to file a return for every
quarter of the year.
(I) From Form 1040, Schedule C—
(1) Purchases less cost of items with-
drawn for personal use;
(2) Materials and supplies;
(3) Gross income;
(4) Total expenses; and
(5) Net profit or loss.
(J) From Form 1040 (Schedule SE)—

December 9, 2024 1226 Bulletin No. 2024–50
(1) Taxpayer identifying number of
self-employed individual;
(2) Business activities subject to the tax
imposed by chapter 21 of the Code;
(3) Net earnings from farming;
(4) Net earnings from nonfarming
activities;
(5) Total net earnings from self-em-
ployment;
(6) Taxable self-employment income
for purposes of chapter 2 of the Code;
(7) Net profit and loss; and
(8) Church employee income.
(K) Total Social Security taxable earn-
ings.
(L) Quarters of Social Security cover-
age.
(M) From Form 940–
(1) State of state unemployment tax;
and
(2) Total payments to all employees.
(N) From Form 941–
(1) Number of employees who received
wages, tips, or other compensation for the
pay period including: March 12 (Quarter
1), June 12 (Quarter 2), September 12
(Quarter 3), or December 12 (Quarter 4);
and
(2) Wages, tips, and other compensa-
tion.
(O) From Form 943–
(1) Agricultural employees; and
(2) Total wages subject to Social Secu-
rity tax.
(P) Taxpayer identity information (as
defined in section 6103(b)(6) of the Code)
including parent corporation, shareholder,
partner, and employer identity informa-
tion.
(Q) Gross income, profits, or receipts.
(R) Returns and allowances.
(S) Cost of labor, salaries, and wages.
(T) Total expenses or deductions,
including totals of the following compo-
nents thereof:
(1) Repairs (and maintenance) expense;
(2) Rents (or lease) expense;
(3) Taxes and licenses expense;
(4) Interest expense, including mort-
gage or other interest;
(5) Depreciation expense;
(6) Depletion expense;
(7) Advertising expense;
(8) Pension and profit-sharing plans
(retirement plans) expense;
(9) Employee benefit programs expense;
(10) Utilities expense;
(11) Supplies expense;
(12) Contract labor expense; and
(13) Management (and investment
advisory) fees.
(U) Total assets.
(V) Beginning- and end-of-year inven-
tory.
(W) Royalty income.
(X) Interest income, including portfo-
lio interest.
(Y) Rental income, including gross
rents.
(Z) Tax-exempt interest income.
(AA) Net gain from sales of business
property.
(BB) Other income.
(CC) Total income.
(DD) Percentage of stock owned by
each shareholder.
(EE) Percentage of capital ownership
of each partner.
(FF) Principal industrial activity code,
including the business description.
(GG) Consolidated return indicator.
(HH) Wages, tips, and other compen-
sation.
(II) Social Security wages.
(JJ) Deferred wages.
(KK) Social Security tip income.
(LL) Total Social Security taxable
earnings.
(MM) From Form 1099-R— Gross
distributions from employer-sponsored
and individual retirement plans.
(NN) From Form 3921–
(1) Date option granted;
(2) Date option exercised;
(3) Exercise price paid per share;
(4) Fair market value per share on exer-
cise date; and
(5) Number of shares transferred.
(OO) From Form 6765 (when filed
with corporation income tax returns)—
(1) Indicator that total qualified
research expenses is greater than zero, but
less than $1 million; greater than or equal
to $1 million, but less than $3 million; or,
greater than or equal to $3 million;
(2) Cycle posted; and
(3) Research tax credit amount to be
carried over to a business return, sched-
ule, or form.
(PP) Total number of documents
reported on Form 1096 transmitting Forms
1099–MISC.
(QQ) Total amount reported on Form
1096 transmitting Forms 1099–MISC.
(RR) From Form 1125–A, purchases.
(SS) From Form 1041–
(1) Interest income;
(2) Total ordinary dividends;
(3) Total income;
(4) Charitable deduction; and
(5) Taxable income.
(TT) From Form 1041, Schedule K-1–
(1) Beneficiary identifying number;
(2) Beneficiary name;
(3) Interest income;
(4) Total ordinary dividends;
(5) Net short-term capital gain;
(6) Net long-term capital gain;
(7) Other portfolio and non-business
income;
(8) Ordinary business income;
(9) Net rental and real estate income;
and
(10) Other rental income.
(UU) From Form 1120–
(1) Cost of goods sold;
(2) Compensation of officers; and
(3) Salaries and wages (less employ-
ment credits).
(VV) From Form 1120-REIT–
(1) Compensation of officers;
(2) Salaries and wages (less employ-
ment credits);
(3) Total assets;
(4) Principal Business Activity (PBA)
code; and
(5) Type of real estate investment trust
(REIT).
(WW) From Form 1120-S–
(1) Cost of goods sold; and
(2) Salaries and wages (less employ-
ment credits).
(XX) From Form 1120-S, Schedule
K–1–
(1) Ordinary business income (loss);
(2) Net rental real estate income;
(3) Other net rental income;
(4) Interest income;
(5) Total ordinary dividends;
(6) Royalties;
(7) Net short-term capital gain;
(8) Net long-term capital gain;
(9) Other income (loss); and
(10) Current year allocation percent-
age.
(YY) From Form 1065–
(1) Gross receipts or sales less returns
and allowances;
(2) Cost of goods sold; and
(3) Ordinary dividends.
(ZZ) From Form 1065, Schedule K–1—

Bulletin No. 2024–50 1227 December 9, 2024
(1) Publicly-traded partnership indica-
tor;
(2) Partner’s share of nonrecourse,
qualified nonrecourse, and recourse liabil-
ities;
(3) Ordinary business income;
(4) Net rental real estate income;
(5) Other net rental income;
(6) Total guaranteed payments;
(7) Interest income;
(8) Total ordinary dividends;
(9) Dividend equivalents;
(10) Royalties;
(11) Net short-term capital gain;
(12) Net long-term capital gain; and
(13) Other income.
(AAA) From Form 3800 Part II (Cur-
rent Year General Business Credit from
Form 6765).
(BBB) From Form 3800, Part III,
Increasing research activities (Form
6765).
(CCC) Dividends, including ordinary
or qualified.
(iii) With respect to returns filed on
behalf of a tax-exempt organization–
(A) Taxpayer identity information (as
defined in section 6103(b)(6) of the Code).
(B) Activity codes.
(C) Filing requirement code.
(D) Monthly corrections of, and addi-
tions to, the information described in para-
graphs (b)(1)(iii)(A) through (C) of this
section.
(E) From Form 990, Salaries, other
compensation, employee benefits.
(F) From Form 990-PF–
(1) Compensation of officers, directors,
trustees, etc.; and
(2) Pension plans, employee benefits.
(G) From Form 990-EZ, Salaries, other
compensation, employee benefits.
(iv) With respect to taxpayers filing
information returns relating to health
insurance:
(A) From Form 1095-A–
(1) Marketplace information;
(2) Policy issuer’s name;
(3) Recipient’s name;
(4) Recipient’s Social Security number;
(5) Recipient’s spouse’s name;
(6) Recipient’s spouse’s Social Secu-
rity number;
(7) Policy start date;
(8) Policy termination date;
(9) Covered individual Social Security
number;
(10) Coverage start date;
(11) Coverage termination date;
(12) Monthly enrollment premium;
(13) Monthly second lowest cost silver
plan premium;
(14) Monthly advance payment of pre-
mium tax credit;
(15) Annual premium;
(16) Annual second lowest cost silver
plan premium; and
(17) Annual advance payment of pre-
mium tax credit.
(B) From Form 1095-B–
(1) Name;
(2) Social Security number;
(3) Date of birth;
(4) Origin of health coverage;
(5) Employer name;
(6) Employer identification number of
issuer or other coverage provider;
(7) Employer address;
(8) Employer identification number;
(9) Name control validation;
(10) Social Security number of covered
individuals;
(11) Date of birth of covered individ-
uals; and
(12) Coverage by month of covered
individuals.
(C) From Form 1095-C–
(1) Name of employee;
(2) Social Security number or other tax-
payer identification number of employee;
(3) Address of employee;
(4) Name of employer;
(5) Employer identification number;
(6) Employer address;
(7) Offer of coverage code;
(8) Checkbox for employer provided
self-insured coverage;
(9) Employee required contribution, all
12 months;
(10) Name control validation;
(11) Social Security number or other
taxpayer identification number of covered
individuals; and
(12) Coverage by month of covered
individuals.
(v) With respect to taxpayers filing
information returns related to health sav-
ings accounts, from Form 5498-SA–
(A) Taxpayer identification number;
(B) Total contributions;
(C) Fair market value of accounts; and
(D) Account type checkboxes.
(2) Subject to the requirements of para-
graph (d) of this section and §301.6103(p)
(2)(B)-1, officers or employees of the
Social Security Administration to whom
the following return information reflected
on returns has been disclosed as provided
by section 6103(l)(1)(A) or (l)(5) may
disclose such information to officers and
employees of the Bureau of the Census
for necessary purposes described in para-
graph (b)(1) of this section:
(i) From Form SS-4, all information
reflected on such form.
(ii) From Form 1040 (Schedule SE)—
(A) Taxpayer identifying number of
self-employed individual;
(B) Business activities subject to the
tax imposed by chapter 21 of the Code;
(C) Net earnings from farming;
(D) Net earnings from nonfarming
activities;
(E) Total net earnings from self-em-
ployment; and
(F) Taxable self-employment income
for purposes of chapter 2 of the Code.
(iii) From Form W-2, and related forms
and schedules—
(A) Social Security number;
(B) Employer identification number;
(C) Wages, tips, and other compensa-
tion;
(D) Social Security wages; and
(E) Deferred wages.
(iv) Total Social Security taxable earn-
ings.
(v) Quarters of Social Security cover-
age.
(3)(i) Officers or employees of the
Internal Revenue Service will disclose
the following return information (but not
including return information described in
section 6103(o)(2)) reflected on returns
of corporations with respect to the tax
imposed by chapter 1 of the Code to offi-
cers and employees of the Bureau of the
Census for purposes of, but only to the
extent necessary in, developing and pre-
paring, as authorized by law, the Quarterly
Financial Report:
(A) From the business master files of
the Internal Revenue Service—
(1) Taxpayer identity information
(as defined in section 6103(b)(6) of the
Code), including parent corporation iden-
tity information;
(2) Document code;
(3) Consolidated return and final return
indicators;
(4) Principal industrial activity code;

December 9, 2024 1228 Bulletin No. 2024–50
(5) Partial year indicator;
(6) Annual accounting period;
(7) Gross receipts less returns and
allowances; and
(8) Total assets.
(B) From Form SS–4—
(1) Month and year in which such form
was executed;
(2) Taxpayer identity information
(as defined in section 6103(b)(6) of the
Code); and
(3) Principal industrial activity, geo-
graphic, firm size, and reason for applica-
tion codes.
(C) From Form 1120–REIT—
(1) Type of REIT; and
(2) Gross rents from real property.
(D) From Form 1120F, corporation’s
method of accounting.
(E) From Form 1096, total amount
reported.
(ii) Subject to the requirements of para-
graph (d) of this section and §301.6103(p)
(2)(B)–1, officers or employees of the
Social Security Administration to whom
return information reflected on returns of
corporations described in paragraph (b)(3)
(i)(B) of this section has been disclosed as
provided by section 6103(l)(1)(A) or (l)
(5) may disclose such information to offi-
cers and employees of the Bureau of the
Census for a purpose described in para-
graph (b)(3)(i) of this section.
(iii) Return information reflected on
employment tax returns disclosed pursu-
ant to paragraph (b)(1)(ii)(H)(1), (2), (4),
(9), or (10) of this section may be used by
officers and employees of the Bureau of
the Census for the purpose described in
and subject to the limitations of paragraph
(b)(3)(i) of this section.
* * * * *
(d) Procedures and restrictions. (1)
Disclosure of return information reflected
on returns by officers or employees of the
Internal Revenue Service or the Social
Security Administration as provided by
paragraphs (b) and (c) of this section will
be made only upon written request to the
Commissioner of Internal Revenue by the
Secretary of Commerce describing—
(i) The particular return information
reflected on returns to be disclosed;
(ii) The taxable period or date to which
such return information reflected on
returns relates; and
(iii) The particular purpose for which
the return information reflected on returns
is to be used, and designating by name
and title the officers and employees of the
Bureau of the Census or the Bureau of
Economic Analysis to whom such disclo-
sure is authorized.
(2) No officer or employee of the
Bureau of the Census or the Bureau of
Economic Analysis to whom return infor-
mation reflected on returns is disclosed
pursuant to the provisions of paragraph
(b) or (c) of this section may disclose
such information to any person, other
than, pursuant to section 6103(e)(1), the
taxpayer to whom such return informa-
tion reflected on returns relates or other
officers or employees of such bureau
whose duties or responsibilities require
such disclosure for a purpose described
in paragraph (b) or (c) of this section,
except in a form that cannot be associ-
ated with, or otherwise identify, directly
or indirectly, a particular taxpayer. If the
Internal Revenue Service determines that
the Bureau of the Census or the Bureau
of Economic Analysis, or any officer or
employee thereof, has failed to, or does
not, satisfy the requirements of section
6103(p)(4) of the Code or regulations
in this part or published procedures
(see §601.601(d)(2) of this chapter),
the Internal Revenue Service may take
such actions as are deemed necessary to
ensure that such requirements are or will
be satisfied, including suspension of dis-
closures of return information reflected
on returns otherwise authorized by sec-
tion 6103(j)(1) and paragraph (b) or (c)
of this section, until the Internal Revenue
Service determines that such require-
ments have been or will be satisfied.
(3) All projects using returns or return
information disclosed to the Bureau
of Census under this section must be
approved by the Internal Revenue Service
Director of Statistics of Income, the Direc-
tor’s successor, or the Director’s delegate,
prior to the release of such information.
(4) In its sole discretion, the Inter-
nal Revenue Service may authorize the
use of the Bureau of Census’s disclo-
sure review processes prior to any pub-
lic disclosure by the Bureau of Census
of a project using information provided
pursuant to this section. Any Bureau of
Census disclosure review process autho-
rized under this paragraph (d)(4) must
ensure that all releases meet or exceed
all requirements set by the Internal Rev-
enue Service for protecting the confiden-
tiality of returns and return information.
Additionally, in its sole discretion, the
Internal Revenue Service Statistics of
Income Disclosure Review Board may
review a Bureau of Census project using
information provided pursuant to this
section prior to disclosure of that project
to the public to ensure that any proposed
releases meet or exceed all requirements
set by the Internal Revenue Service for
protecting the confidentiality of returns
and return information. This review
requirement may be imposed at any
stage of the project.
(e) Applicability date. This section
applies to disclosures of return informa-
tion made on or after November 26, 2024.
Heather C. Maloy,
Acting Deputy Commissioner.
Approved: November 6, 2024.
Aviva R. Aron-Dine,
Deputy Assistant Secretary of the Trea-
sury (Tax Policy).
(Filed by the Office of the Federal Register (TBD),
and published in the issue of the Federal Register for
TBD, TBD FR TBD)

Bulletin No. 2024–50 1229 December 9, 2024
Part III
Extension of Transition
Process for Claiming the
Statutory Exceptions to
the Elective Payment
Phaseouts
Notice 2024-84
SECTION 1. PURPOSE
This notice extends the transition pro-
cess for claiming a statutory exception to
the elective payment phaseouts contained
in section 5 of Notice 2024-9, 2024-2
I.R.B. 358. Thus, if an Applicable Entity
provides an attestation described in sec-
tion 5.02 of Notice 2024-9 with respect
to an Applicable Credit Property the con-
struction of which begins before the later
of January 1, 2027, or the issuance of fur-
ther guidance, the Department of the Trea-
sury (Treasury Department) and the Inter-
nal Revenue Service (IRS) will treat the
attestation as establishing that a Domestic
Content Exception is met with respect to
such Applicable Credit Property.
The Treasury Department and the IRS
intend to propose regulations addressing
the process by which the Secretary of the
Treasury or her delegate (Secretary) will
implement the statutorily-required excep-
tions to the phaseouts under §§ 45Y(g)
(12) and 48E(d)(5) of the Internal Reve-
nue Code (Code).
1
The provisions of this
notice apply with respect to an Applicable
Credit Property the construction of which
begins before the later of January 1, 2027,
or the issuance of further guidance.
SECTION 2. BACKGROUND
On January 8, 2024, the Treasury Depart-
ment and the IRS published Notice 2024-9,
2024-2 I.R.B. 358, providing that an Appli-
cable Entity may attest, under penalties of
perjury, that it has reviewed the requirements
for the Increased Cost Exception and the
Non-Availability Exception (each defined
in section 2 of Notice 2024-9) provided
under §§ 45(b)(10)(D), 48(a)(13), 45Y(g)
(12)(D), or 48E(d)(5), as applicable, and
has made a good faith determination that the
Applicable Credit Property qualifies for the
Increased Cost Exception, the Non-Avail-
ability Exception, or both. The attestation
must be signed by a person with the legal
authority to bind the Applicable Entity in
federal tax matters and must be attached to a
Form 8835, Renewable Electricity Produc-
tion Credit; Form 3468, Investment Credit;
or other applicable form required to be filed
by the Applicable Entity to make an elective
payment election under § 6417. The notice
states that the Treasury Department and the
IRS will accept such attestations as estab-
lishing that one or both statutory exceptions
to the application of the Statutory Elective
Payment Phaseouts are met with respect to
Applicable Credit Property the construction
of which begins before January 1, 2025.
SECTION 3. CONTINUED
TRANSITION
.01 Exception for Eligible Construc-
tion. If an Applicable Entity provides an
attestation described in section 3.02 of this
notice with respect to an Applicable Credit
Property the construction of which begins
before the later of January 1, 2027, or the
issuance of further guidance (Eligible Con-
struction), the Treasury Department and the
IRS will treat the attestation as establishing
that one or both statutory exceptions to the
application of the Statutory Elective Pay-
ment Phaseouts are met with respect to the
Applicable Credit Property.
.02 Attestation. An attestation is
described in this section 3.02 if an Appli-
cable Entity attests, under penalties of
perjury, that it has reviewed the require-
ments for the Increased Cost Exception
and the Non-Availability Exception pro-
vided under §§ 45(b)(10)(D), 48(a)(13),
45Y(g)(12)(D), or 48E(d)(5), as applica-
ble, and has made a good faith determina-
tion that the qualified facility, energy proj-
ect, or qualified investment with respect
to a qualified facility or energy storage
technology, as applicable, qualifies for
either the Increased Cost Exception or the
Non-Availability Exception, or both. The
attestation described in this section 3.02
must be signed by a person with the legal
authority to bind the Applicable Entity in
federal tax matters and must be attached
to a Form 8835, Renewable Electricity
Production Credit; Form 3468, Investment
Credit; or other applicable form required to
be filed by the Applicable Entity to make
an elective payment election under § 6417.
.03 Recordkeeping. An Applicable
Entity providing an attestation described
in section 3.02 of this notice must meet the
general recordkeeping requirements under
§ 6001 and the regulations thereunder to
substantiate its attestation.
SECTION 4. PAPERWORK
REDUCTION ACT
Any collection burden associated with
this notice is accounted for in Office of
Management and Budget (OMB) control
numbers 1545-0123 and 1545-0047. The
collection of information (the attestation
detailed in section 3 of this notice) is associ-
ated with the IRA-related changes to Form
3468 and Form 8835 and is approved, and
will continue to be approved, under OMB
control numbers 1545-0123 and 1545-
0047. The IRS will use this attestation to
allow exceptions to the phaseout of elec-
tive payments. This notice does not alter
any previously approved information col-
lection requirements and does not create
new collection requirements not already
approved by OMB.
SECTION 5. EFFECT ON OTHER
DOCUMENTS
Notice 2024-9 is modified by extend-
ing the date for Eligible Construction.
SECTION 6. DRAFTING
INFORMATION
The principal author of this notice
is the Office of Associate Chief Coun-
sel (Passthroughs & Special Industries).
However, other personnel from the Trea-
sury Department and the IRS participated
in its development. For further informa-
tion regarding this notice, call the energy
security guidance contact number at (202)
317-5254 (not a toll-free number).
1
Unless otherwise specified, all “section” or “§” references are to sections of the Code.

December 9, 2024 1230 Bulletin No. 2024–50
Part IV
Second Remedial
Amendment Cycle for
§ 403(b) Pre-approved
Plans: Issuance of Opinion
Letters, Plan Adoption
Deadline, Opening of
Determination Letter
Program, and Related
Issues
Announcement 2024-38
Section 1. Purpose and Scope
The Internal Revenue Service (IRS)
intends to begin issuing opinion let-
ters regarding the satisfaction in form
of § 403(b) pre-approved plans with
respect to the requirements of § 403(b)
of the Internal Revenue Code, including
the 2022 Cumulative List of changes
in those requirements.
1
Opinion let-
ter applications were filed with the IRS
for the second remedial amendment
cycle (Cycle 2) under the remedial
amendment cycle system for § 403(b)
pre-approved plans established under
Rev. Proc. 2019-39, 2019-42 IRB 945.
The IRS expects to issue the opinion let-
ters by November 29, 2024, or as soon
as possible thereafter.
This announcement provides a dead-
line for when an employer intending
to maintain a Cycle 2 § 403(b) pre-ap-
proved plan must adopt that plan and the
period during which the IRS will accept
an application for an individual determi-
nation letter from an adopting employer
of a Cycle 2 § 403(b) pre-approved plan
that is eligible to submit a determination
letter request.
This announcement also discusses a
procedural restatement rule that applies
to all pre-approved plans and provides
a reminder for adopting employers of
§ 403(b)(9) retirement income account
plans of a requirement provided by
§ 403(b)(9).
Section 2. Background
Rev. Proc. 2019-39, in relevant part,
sets forth a system of recurring remedial
amendment cycles and recurring reme-
dial amendment periods for correcting
form defects in § 403(b) pre-approved
plans. Section 13.04 of Rev. Proc. 2019-
39 includes a procedural rule regard-
ing restatements for the first remedial
amendment cycle (Cycle 1) for § 403(b)
pre-approved plans providing that a plan
that is restated using a Cycle 1 § 403(b)
pre-approved plan will not be treated as
superseding a previously adopted interim
amendment. This restatement rule is anal-
ogous to the restatement rule for qualified
defined contribution and defined benefit
pre-approved plans that currently applies
to the third remedial amendment cycle
(Cycle 3) for qualified pre-approved plans
pursuant to section 15.07 of Rev. Proc.
2016-37, 2016-29 IRB 136.
Rev. Proc. 2021-37, 2021-38 IRB 385,
sets forth the procedures for a provider to
apply for an opinion letter with respect to
a Cycle 2 § 403(b) pre-approved plan.
Section 25 of Rev. Proc. 2023-37, 2023-
51 IRB 1491, sets forth the procedures
for an adopting employer of a § 403(b)
pre-approved plan, including a Cycle 2
plan, to apply for a determination letter
with respect to its plan.
Section 3. Deadline for Employer Adop-
tion of Cycle 2 § 403(b) Pre-approved Plans
An employer intending to maintain a
§ 403(b) pre-approved plan for Cycle 2
for § 403(b) pre-approved plans must
adopt that pre-approved plan on or before
December 31, 2026. See section 5.02 of
Rev. Proc. 2023-37.
Section 4. Determination Letter Pro-
gram for an Adopter of a Cycle 2 § 403(b)
Pre-approved Plan
An adopting employer of a Cycle 2
§ 403(b) pre-approved plan may generally
apply for an individual determination
letter (if otherwise eligible) during the
period beginning January 1, 2025, and
ending December 31, 2026. Additional
information regarding individual deter-
mination letter applications for § 403(b)
pre-approved plans, including guidance
on employer eligibility to apply for a
determination letter for a pre-approved
plan and the filing requirements for
Form 5307 (or Form 5300, if appli-
cable), may be found in section 25 of
Rev. Proc. 2023-37.
Section 5. Clarification on Applicability
of the Restatement Rule
The restatement rule in Rev. Proc. 2019-
39 and Rev. Proc. 2016-37 does not spe-
cifically address its application to Cycle 2
(and future) § 403(b) pre-approved plans
or Cycle 4 (and future) qualified pre-ap-
proved plans. Future guidance will clar-
ify that the restatement rule in Rev. Proc.
2019-39 and Rev. Proc. 2016-37 continues
to apply to all pre-approved plans, includ-
ing Cycle 2 (and future) § 403(b) pre-ap-
proved plans and Cycle 4 (and future)
qualified pre-approved plans.
Section 6. Reminder for Adopting
Employers of § 403(b)(9) Retirement
Income Account Plans
Section 403(b)(9) provides that a retire-
ment income account must either be
established or maintained by a church, or
a convention or association of churches,
including an organization described
in § 414(e)(3)(A). Thus, for a retire-
ment income account plan, the adopting
employer may be a church, a church-con-
trolled organization described in § 501(c)
(3) that is a qualified church-controlled
1
The 2022 Cumulative List of Changes in Section 403(b) Requirements for Section 403(b) Pre-approved Plans was published as Notice 2022-8, 2022-7 IRB 491.

Bulletin No. 2024–50 1231 December 9, 2024
organization within the meaning of § 3121
(QCCO), a church-controlled tax-exempt
organization listed in § 501(c)(3) that is
not a QCCO, or a minister. However, pur-
suant to the “established or maintained”
language of § 403(b)(9), if the plan is not
established by a church, or a convention
or association of churches, including an
organization described in § 414(e)(3)(A),
the plan must be maintained by a church,
or a convention or association of churches,
including an organization described in
§ 414(e)(3)(A).
Section 7. Paperwork Reduction Act
The collection of information contained
in Rev. Proc. 2021-37 with respect to
the § 403(b) pre-approved plan program
has been reviewed and approved by the
Office of Management and Budget in
accordance with the Paperwork Reduc-
tion Act (44 U.S.C. 3507) under control
number 1545-0047.
Section 8. Drafting Information
The principal author of this announcement
is Sarah Sandusky of the Office of Asso-
ciate Chief Counsel (Employee Benefits,
Exempt Organizations, and Employment
Taxes). For further information regard-
ing this announcement, contact Employee
Plans at (513) 975-6319 (not a toll-free
number).
Deletions From Cumulative
List of Organizations,
Contributions to Which are
Deductible Under Section
170 of the Code
Announcement 2024-39
Table of Contents
The Internal Revenue Service has revoked
its determination that the organizations
listed below qualify as organizations
described in sections 501(c)(3) and 170(c)
(2) of the Internal Revenue Code of 1986.
Generally, the IRS will not disallow
deductions for contributions made to a
listed organization on or before the date
of announcement in the Internal Revenue
Bulletin that an organization no longer
qualifies. However, the IRS is not pre-
cluded from disallowing a deduction for
any contributions made after an organiza-
tion ceases to qualify under section 170(c)
(2) if the organization has not timely filed
a suit for declaratory judgment under sec-
tion 7428 and if the contributor (1) had
knowledge of the revocation of the ruling
or determination letter, (2) was aware that
such revocation was imminent, or (3) was
in part responsible for or was aware of the
activities or omissions of the organization
that brought about this revocation.
If on the other hand a suit for declaratory
judgment has been timely filed, contri-
butions from individuals and organiza-
tions described in section 170(c)(2) that
are otherwise allowable will continue
to be deductible. Protection under sec-
tion 7428(c) would begin on November
25, 2024, and would end on the date the
court first determines the organization is
not described in section 170(c)(2) as more
particularly set for in section 7428(c)(1).
For individual contributors, the maximum
deduction protected is $1,000, with a hus-
band and wife treated as one contributor.
This benefit is not extended to any indi-
vidual, in whole or in part, for the acts or
omissions of the organization that were
the basis for revocation.
Name Of OrganizationEffective Date of RevocationLocation
Heritage Foundation for Art & Cultural Sustainability1/1/2021New Orleans, LA
Esperanza Education Foundation7/1/2020Albuquerque, NM

December 9, 2024 1232 Bulletin No. 2024–50
Notice of Proposed
Rulemaking
Administrative
Requirements for an
Election to Exclude
Applicable Unincorporated
Organizations from
the Application of
Subchapter K
REG-116017-24
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemak-
ing; notice of public hearing.
SUMMARY: This document contains pro-
posed regulations that would provide cer-
tain administrative requirements for unin-
corporated organizations taking advantage
of modifications to the rules governing elec-
tions to be excluded from the application
of partnership tax rules. These proposed
regulations would affect unincorporated
organizations and their members, includ-
ing tax-exempt organizations, the District
of Columbia, State and local govern-
ments, Indian Tribal governments, Alaska
Native Corporations, the Tennessee Valley
Authority, rural electric cooperatives, and
certain agencies and instrumentalities. The
proposed regulations would also update
the procedure for obtaining permission to
revoke a section 761(a) election.
DATES: Written or electronic comments
must be received by January 21, 2025. A
public hearing on these proposed regula-
tions has been scheduled for February 7,
2025, at 10 a.m. EST. Requests to speak
and outlines of topics to be discussed at the
public hearing must be received by Janu-
ary 21, 2025. If no outlines are received
by January 21, 2025, the public hearing
will be cancelled. Requests to attend the
public hearing must be received by 5 p.m.
on February 5, 2025.
ADDRESSES: Commenters are strongly
encouraged to submit public comments
electronically via the Federal eRulemak-
ing Portal at https://www.regulations.gov
(indicate IRS and REG-116017-24) by
following the online instructions for sub-
mitting comments. Requests for a public
hearing must be submitted as prescribed
in the “Comments and Public Hearing”
section. Once submitted to the Federal
eRulemaking Portal, comments cannot be
edited or withdrawn. The Department of
the Treasury (Treasury Department) and
the IRS will publish for public availabil-
ity any comments submitted to the IRS’s
public docket.
Send paper submissions to: CC:PA:01:PR
(REG-116017-24), Room 5203, Internal
Revenue Service, P.O. Box 7604, Ben
Franklin Station, Washington, DC 20044.
FOR FURTHER INFORMATION
CONTACT: Concerning the proposed
regulations, contact Cameron Williamson
at (202) 317-6684; and concerning sub-
missions of comments and requests for a
public hearing, contact the Publications
and Regulations Section at (202) 317-
6901 (not toll-free numbers) or by email
to publichearings@irs.gov (preferred).
SUPPLEMENTARY INFORMATION:
Authority
This document contains proposed
amendments to the Income Tax Regula-
tions (26 CFR part 1) under section 761(a)
of the Internal Revenue Code (Code)
issued by the Secretary of the Treasury or
her delegate (Secretary) under the express
authority granted under sections 761(a),
6031(a), 6417(d) and (h), and 7805(a) of
the Code (proposed regulations).
Section 761(a) provides, in part, an
express grant of regulatory authority for
section 761(a) stating, “[u]nder regula-
tions the Secretary may, at the election
of all the members of an unincorporated
organization, exclude such organization
from the application of all or a part of this
subchapter.”
Section 6031(a) provides an express
grant of a regulatory authority for the
Secretary to prescribe in forms or regu-
lations partnership reporting information
required “for the purpose of carrying out
the provisions of subtitle A.”
Section 6417(d) provides several
express delegations of authority to the
Secretary to enforce requirements for
elective payments of applicable credits
under section 6417 and recapture exces-
sive payments. Section 6417(h) requires
the Secretary to issue regulations or other
guidance as may be necessary to carry
out the purposes of section 6417, includ-
ing guidance to ensure that the amount
of the payment or deemed payment made
under this section is commensurate with
the amount of the credit that would be
otherwise allowable (determined without
regard to section 38(c)).
Finally, section 7805(a) authorizes the
Secretary to “prescribe all needful rules
and regulations for the enforcement of
[the Code], including all rules and regu-
lations as may be necessary by reason of
any alteration of law in relation to internal
revenue.”
Background
I. Elective Payment of Applicable Credits
Section 6417 was added to the Code
by section 13801(a) of Public Law 117–
169, 136 Stat. 1818, 2003 (August 16,
2022), commonly referred to as the Infla-
tion Reduction Act of 2022 (IRA). Sec-
tion 6417 allows an “applicable entity”
(including tax-exempt organizations,
the District of Columbia, State and local
governments, Indian Tribal governments,
Alaska Native Corporations, the Tennes-
see Valley Authority, rural electric coop-
eratives, and certain agencies and instru-
mentalities) to make an election to treat
an “applicable credit” (as defined in sec-
tion 6417(b)) determined with respect to
such entity as making a payment by such
entity against the tax imposed by subtitle
A of the Code, for the taxable year with
respect to which such credit is determined,
equal to the amount of such credit. Section
6417 also provides special rules relating
to partnerships and directs the Secretary to
provide rules for making elections under
section 6417. Section 13801(g) of the IRA
provides that section 6417 applies to tax-
able years beginning after December 31,
2022.
On March 11, 2024, the Treasury
Department and the IRS published in the
Federal Register (88 FR 40528) final reg-

Bulletin No. 2024–50 1233 December 9, 2024
ulations (TD 9988) providing guidance on
the section 6417 elective payment elec-
tion (section 6417 regulations). Section
1.6417-2(a)(1)(iv) provides that partner-
ships are not applicable entities described
in section 6417(d)(1)(A) or §1.6417-1(c),
regardless of how many of their partners
are themselves applicable entities. Accord-
ingly, any partnership making an elective
payment election must be an electing tax-
payer (as defined in §1.6417-1(g)), and,
as such, the only applicable credits with
respect to which the partnership could
make an elective payment election would
be credits determined under sections 45Q,
45V, and 45X for the time periods allowed
in section 6417(d). However, §1.6417-
2(a)(1)(iii) provides that if an applicable
entity is a co-owner in an applicable credit
property (as defined in §1.6417-1(e)),
through an organization that has made a
valid election under section 761(a) (sec-
tion 761(a) election) to be excluded from
the application of the partnership tax rules
of subchapter K of chapter 1 of the Code
(subchapter K), then the applicable enti-
ty’s undivided ownership share of the
applicable credit property is treated as a
separate applicable credit property owned
by such applicable entity. As a result,
the applicable entity may make an elec-
tive payment election for the applicable
credit(s) determined with respect to such
applicable credit property.
Also on March 11, 2024, the Treasury
Department and the IRS published in the
Federal Register (89 FR 17613) proposed
amendments (REG-101552-24) to the
regulations under section 761(a) to carry
out the purposes of section 6417 (March
2024 proposed regulations). Generally,
the March 2024 proposed regulations
would have amended certain provisions of
§1.761-2 to provide that unincorporated
organizations meeting certain require-
ments (applicable unincorporated orga-
nizations) are eligible for certain modi-
fications to the existing requirements for
making a section 761(a) election.
Concurrently with the publication of
these proposed regulations, the Treasury
Department and the IRS are publish-
ing in the Rules and Regulations section
of this edition of the Federal Register a
Treasury decision (TD 10012, RIN 1545-
BR09) adopting certain provisions of
§1.761-2 of the March 2024 proposed reg-
ulations as final regulations under section
761(a) (final regulations). The provisions
of §1.761-2 of the final regulations are
explained in greater detail in the preamble
to the final regulations. The provisions of
§1.761-2 in effect as of January 19, 2025
are referred to in this preamble as “revised
§1.761-2.”
II. Overview of Section 761(a) and
Revised §1.761-2
Section 761(a) provides, in part, that
under regulations the Secretary may, at
the election of all of the members of an
unincorporated organization, exclude
such organization from the application of
all or part of subchapter K if the organiza-
tion is availed of: (1) for investment pur-
poses only and not for the active conduct
of a business, (2) for the joint production,
extraction, or use of property, but not for
the purpose of selling services or property
produced or extracted, or (3) by dealers in
securities for a short period for the purpose
of underwriting, selling, or distributing a
particular issue of securities, provided that
the income of the members of the orga-
nization may be adequately determined
without the computation of partnership
taxable income.
Unincorporated organizations seeking
to make an election to be excluded from
the application of subchapter K so that
one or more of their members can make
an election under section 6417 are likely
to be availed of for the purposes listed
in section 761(a)(2), that is, for the joint
production, extraction, or use of property,
but not for the purpose of selling services
or property produced or extracted. Pur-
suant to the authority in section 761(a),
revised §1.761-2(a)(3) provides addi-
tional requirements for an unincorporated
organization to elect to be excluded from
the application of subchapter K under
section 761(a)(2). Specifically, revised
§1.761-2(a)(3) requires that the partici-
pants in the joint production, extraction,
or use of property: (i) own the property as
co-owners, either in fee or under lease or
other form of contract granting exclusive
operating rights (co-ownership require-
ment), (ii) reserve the right separately to
take in kind or dispose of their shares of
any property produced, extracted, or used,
and (iii) do not jointly sell services or the
property produced or extracted (joint mar-
keting requirement), although each sepa-
rate participant may delegate authority to
sell the participant’s share of the property
produced or extracted for the time being
for the participant’s account, but not for a
period of time in excess of the minimum
needs of the industry, and in no event for
more than one year.
The final regulations modify the
co-ownership and joint marketing require-
ments for “applicable unincorporated
organizations.” Under revised §1.761-2(a)
(4)(ii), an applicable unincorporated orga-
nization is defined as an unincorporated
organization (1) that is owned, in whole or
in part, by one or more applicable entities,
as defined in section 6417(d)(1)(A) and
§1.6417-1(c), (2) the members of which
enter into a joint operating agreement in
which the members reserve the right sep-
arately to take in kind or dispose of their
pro rata shares of any property produced,
extracted, or used, and any associated
renewable energy credits or similar cred-
its, (3) that, pursuant to the joint operat-
ing agreement, is organized exclusively to
own and operate applicable credit property
(as defined in §1.6417-1(e)), (4) for which
one or more of the applicable entities will
make an elective payment election under
section 6417(a) for the applicable credits
determined with respect to its share of the
applicable credit property, (5) the mem-
bers of which are able to compute their
income without the necessity of comput-
ing partnership taxable income, and (6)
which is not a syndicate, group, pool, or
joint venture which is classifiable as an
association, or any group operating under
an agreement which creates an organiza-
tion classifiable as an association.
Revised §1.761-2(b) provides rules
for making a section 761(a) election.
Revised §1.761-2(b)(2)(i) generally pro-
vides that a section 761(a) election must
be made in a statement attached to, or
incorporated in, a properly executed part-
nership return, Form 1065, U.S. Return
of Partnership Income, which must con-
tain, in lieu of the information required
by Form 1065 and the instructions relat-
ing thereto, the following information:
the name or other identification and the
address of the organization together
with information on the return, or in the
statement attached to the return, show-

December 9, 2024 1234 Bulletin No. 2024–50
ing the names, addresses, and identifica-
tion numbers of all the members of the
organization; a statement that the orga-
nization qualifies under §1.761-2(a)(1)
and either §1.761-2(a)(2) or (3) (taking
into account revised §1.761-2(a)(4), as
applicable); a statement that all of the
members of the organization elect to be
excluded from all of subchapter K; and a
statement indicating where a copy of the
agreement under which the organization
operates is available (or if the agreement
is oral, from whom the provisions of the
agreement may be obtained).
If an unincorporated organization
does not make the section 761(a) election
provided in this manner, revised §1.761-
2(b)(2)(ii) provides (as it provided before
the final regulations) that the organiza-
tion will nevertheless be deemed to have
made the election if it can be shown
from all the surrounding facts and cir-
cumstances that it was the intention of
the members of such organization at the
time of its formation to secure exclusion
from all of subchapter K beginning with
the first taxable year of the organization
(deemed election rule). Although the fol-
lowing facts are not exclusive, the requi-
site intent may be indicated if (1) at the
time of the formation of the organization
there is an agreement among the mem-
bers that the organization be excluded
from the application of subchapter K
beginning with the first taxable year of
the organization, or (2) the members of
the organization owning substantially all
of the capital interests report their respec-
tive shares of the items of income, deduc-
tions, and credits of the organization on
their respective returns (making such
elections as to individual items as may be
appropriate) in a manner consistent with
the exclusion of the organization from
subchapter K beginning with the first tax-
able year of the organization.
III. Reason for Proposed Regulations
Section 6417(d)(5) provides that as
a condition of, and prior to, any amount
being treated as a payment that is made
by an applicable entity, the Secretary
may require such information or regis-
tration as the Secretary deems necessary
for purposes of preventing duplication,
fraud, improper payments, or excessive
payments. Section 6417(h) requires the
Secretary to issue regulations or other
guidance to ensure that the amount of a
payment or deemed payment made under
section 6417 is commensurate with the
amount of the credit that would be other-
wise allowable.
The Treasury Department and the IRS
have determined that additional guidance
outlining certain administrative require-
ments is needed to comply with these stat-
utory directives. After an unincorporated
organization makes a section 761(a) elec-
tion, each member may increase or reduce
(even to zero) its interest in the unincor-
porated organization without affecting the
validity of the section 761(a) election. As
a result, the information submitted to the
IRS in connection with an organization’s
section 761(a) election, as required under
revised §1.761-2(b), can become inaccu-
rate at any time without notice to the IRS.
This lack of reliable and accurate infor-
mation about the applicable entity owners
(if any) of an applicable unincorporated
organization constrains the IRS’s ability
to ensure that the amount of payments
or deemed payments made under section
6417 are commensurate with the amount
of applicable credits that would otherwise
be allowable, as directed under section
6417(h).
This problem is compounded by the
deemed election rule in revised §1.761-
2(b)(2)(ii). A deemed election obscures
any record of an organization’s members
(including any applicable entities) that
are subject to a section 761(a) election
and can be discovered by the IRS only
upon examination. In contrast, a written
election is a relatively simple and effec-
tive means of identifying any applicable
entity owners of applicable credit prop-
erty held through an applicable unincor-
porated organization with a valid section
761(a) election. Moreover, members of
an organization who form an entity or
enter into long-term contracts together are
especially likely to know that their activ-
ities could create a partnership subject to
subchapter K. The Treasury Department
and the IRS have concerns that deemed
elections are not appropriate in such sit-
uations, especially when (as is anticipated
to be typical) applicable entities intend to
make section 6417 elections with respect
to applicable credit property owned by an
unincorporated organization, as such elec-
tions are generally permitted only when
the organization has a valid section 761(a)
election.
Explanation of Provisions
The proposed regulations would
impose new requirements on applicable
unincorporated organizations whose sec-
tion 761(a) elections would not be valid
without the application of revised §1.761-
2(a)(4)(iii) (specified modifications for
applicable unincorporated organizations).
Proposed §1.761-2(a)(4)(iv)(A) would
provide that a specified applicable unin-
corporated organization’s section 761(a)
election will terminate as a result of a
“terminating transaction.” A terminating
transaction is the acquisition or disposi-
tion of an interest in a specified applicable
unincorporated organization, other than
as the result of a transfer between a disre-
garded entity (as defined in §1.6417-1(f))
and its owner since such transfer does
not change the identity of the applicable
entity for purposes of section 6417. See
§1.6417-2(a)(1)(ii); see also proposed
§1.6417-1(f) contained in the notice of
proposed rulemaking Entities Wholly
Owned by Indian Tribal Governments
(REG-113628-21) published in the Fed-
eral Register (89 FR 81871) on October
9, 2024, which alters the definition of dis-
regarded entities for purposes of section
6417.
Terminating transactions will not ter-
minate an applicable unincorporated
organization’s section 761(a) election if
the organization meets the requirements
to make a new section 761(a) election
and makes such an election not later than
the time prescribed by §1.6031(a)-1(e)
(including extensions thereof) for filing
a partnership return with respect to the
period of time that would have been the
organization’s taxable year if, after the
taxable year with respect to which the
organization first made the section 761(a)
election, the organization continued to
have taxable years and such taxable years
were determined by reference to the tax-
able year in which the organization made
the section 761(a) election (hypothetical
partnership taxable year). Such election
will protect the organization’s section
761(a) election against all terminating

Bulletin No. 2024–50 1235 December 9, 2024
transactions in a hypothetical year only
if it contains, in addition to the informa-
tion required by §1.761-2(b), information
about every terminating transaction that
occurred in the hypothetical partnership
taxable year, including the parties thereto
and the interest(s) transferred. If a new
election is not timely made, the section
761(a) election would terminate on the
first day of the taxable year beginning after
the hypothetical partnership taxable year
in which one or more terminating trans-
actions occurred. Proposed §1.761-2(a)
(5)(iv) would add Example 4 to illustrate
this new rule. These provisions are inap-
plicable to an organization that is no lon-
ger eligible to elect to be excluded from
the application of subchapter K. When an
organization becomes ineligible to make a
section 761(a) election, the organization’s
section 761(a) election automatically ter-
minates, and the organization must begin
complying with the requirements of sub-
chapter K.
The proposed regulations would also
clarify that the deemed election rule
in §1.761-2(b)(2)(ii) does not apply
to specified applicable unincorporated
organizations. This change is necessary
to ensure that an unincorporated organi-
zation cannot benefit from the modifica-
tions in revised §1.761-2(a)(4)(iii) with-
out providing written information to the
IRS about its members. The change also
ensures that a specified applicable unin-
corporated organization that terminates
as the result of a terminating transaction
cannot have its election restored without
making a new election in writing. How-
ever, if such an organization can make a
valid section 761(a) election without the
application of either of the specified mod-
ifications in revised §1.761-2(a)(4)(iii),
the organization may be deemed to make
such an election under the deemed elec-
tion rule.
In addition, the proposed regulations
would clarify that an applicable unincor-
porated organization making a section
761(a) election must submit all informa-
tion required by the instructions to Form
1065, U.S. Return of Partnership Income,
for making a section 761(a) election. This
requirement is intended to ensure that
the organization making a section 761(a)
election provides all of the information
necessary for the IRS to properly adminis-
ter section 6417 with respect to applicable
unincorporated organizations making a
section 761(a) election.
The proposed regulations would also
update the procedure for obtaining per-
mission to revoke a section 761(a) elec-
tion. Prior to revision in the final regu-
lations, §1.761-2(b)(3) provided that
taxpayers could revoke a section 761(a)
election by submitting an application for
permission to revoke a section 761(a)
election to the Commissioner of Inter-
nal Revenue, Attention: T:I, Washington,
DC 20224, no later than 30 days after
the beginning of the first taxable year to
which the revocation is to apply. Though
this language did not define what the
application would include, it historically
has been interpreted to mean a private let-
ter ruling request. However, the language
in §1.761-2(b)(3) was imprecise, lists
an incorrect address, and was removed
by the final regulations. The proposed
regulations would clarify that such an
application must be made by submitting
a letter ruling request that complies with
the requirements of Rev. Proc. 2024-1 or
successor guidance. This language would
ensure that the process for making this
application is up-to-date and clear. Tax-
payers may continue to submit applica-
tions for permission to revoke an elec-
tion by requesting a private letter ruling
and can rely on the process in Revenue
Procedure 2024-1 or successor guidance
prior to the date regulations finalizing
these proposed regulations are published
in the Federal Register.
Proposed Applicability Dates
These proposed regulations are pro-
posed to apply to taxable years ending on
or after November 20, 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.
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
information from the public, whether such
collection of information is mandatory,
voluntary, or required to obtain or retain
a benefit. 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 dis-
plays a valid control number.
These proposed regulations mention
reporting and recordkeeping requirements
that must be satisfied for unincorporated
organizations to make and maintain an
election out of subchapter K. These col-
lections of information are generally
used by the IRS for tax compliance pur-
poses and by taxpayers to facilitate proper
reporting and recordkeeping. The likely
respondents to these collections are busi-
nesses and tax-exempt organizations.
These proposed regulations would also
require unincorporated organizations to
provide all information required by the
instructions to Form 1065 for making a
section 761(a) election. This reporting
requirement will be approved by OMB
under 1545-0123 for business filers and
1545-0047 for tax-exempt organizations
in accordance with the PRA procedures in
5 CFR 1320.10.
These proposed regulations would
include recordkeeping requirements for
certain unincorporated organizations to
track changes in ownership of interests in
each such organization. The organizations
can maintain these records in any manner
they deem appropriate. The recordkeep-
ing is needed to determine whether a new
written section 761(a) election must be
filed with the IRS. IRS will seek OMB
approval under a new OMB Control Num-
ber (1545-NEW) for the burden on busi-
ness filers and tax-exempt organizations.
The associated burden for the recordkeep-
ing is estimated as follows:
Estimated number of respondents:
1,000.
Estimated average annual burden per
response: 1 hour.
Estimated total annual reporting bur-
den: 1,000 hours.

December 9, 2024 1236 Bulletin No. 2024–50
The recordkeeping in this proposed
rulemaking has been submitted to OMB
for review in accordance with the PRA
under OMB Control Number 1545-NEW.
Commenters are strongly encouraged to
submit public comments electronically.
Written comments and recommendations
for the proposed information collection
should be sent to www.reginfo.gov/pub-
lic/do/PRAMain, with copies to the IRS.
Find this particular information collection
by selecting “Currently under Review -
Open for Public Comments” then by using
the search function. Submit electronic
submissions for the proposed information
collection to the IRS via email at pra.com-
ments@irs.gov (indicate REG-116017-24
on the Subject line). Comments on the col-
lection of information should be received
by January 21, 2025. Comments are spe-
cifically requested concerning: whether
the proposed collection of information
is necessary for the proper performance
of the functions of the IRS, including
whether the information will have practi-
cal utility; the accuracy of the estimated
burden associated with the proposed col-
lection of information; how the quality,
utility, and clarity of the information to be
collected may be enhanced; how the bur-
den of complying with the proposed col-
lection of information may be minimized,
including through the application of
automated collection techniques or other
forms of information technology; and esti-
mates of capital or start-up costs and costs
of operation, maintenance, and purchase
of services to provide information.
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 sub-
stantial number of small entities. Unless
an agency determines that a proposal is
not likely to have a significant economic
impact on a substantial number of small
entities, section 603 of the RFA requires
the agency to present an initial regula-
tory flexibility analysis (IRFA) of the
proposed rule. The Treasury Department
and the IRS have not determined whether
the proposed rule, when finalized, will
likely have a significant economic impact
on a substantial number of small entities.
This determination requires further study.
However, because there is a possibility of
significant economic impact on a substan-
tial number of small entities, an IRFA is
provided in these proposed regulations.
The Treasury Department and the IRS
invite comments on both the number of
entities affected and the economic impact
on small entities.
Pursuant to section 7805(f), this notice
of proposed rulemaking has been sub-
mitted to the Chief Counsel of for the
Office of Advocacy of the Small Business
Administration for comment on its impact
on small business.
1. Need for and Objectives of the Rule
As discussed in this preamble, the pro-
posed regulations are intended to ensure
that each section 761(a) election by a
specified applicable unincorporated orga-
nization provides all of the information
necessary for the IRS to comply with the
directives of section 6417(d) and (h).
2. Affected Small Entities
The RFA directs agencies to provide a
description of, and where feasible, an esti-
mate of, the number of small entities that
may be affected by the proposed rules,
if adopted. The Small Business Admin-
istration’s Office of Advocacy estimates
in its 2024 Frequently Asked Questions
that 99.9 percent of American businesses
meet its definition of a small business.
The applicability of these proposed regu-
lations does not depend on the size of the
business, as defined by the Small Business
Administration. As described more fully
in the preamble to these proposed regu-
lations and in this IRFA, section 761(a)
and these proposed regulations may affect
a variety of different entities across sev-
eral different industries as there are 12
different applicable credits for which an
elective payment election under section
6417(a) may be made. There is uncertainty
as to the exact number of small businesses
within this group. The current estimated
number of respondents to the section 6417
regulations is 20,000 taxpayers, and it is
likely that a fraction of that number would
be respondents to these proposed regula-
tions.
The Treasury Department and the IRS
expect to receive more information on
the impact on small businesses through
comments on this proposed rule and again
when taxpayers start to make the section
761(a) election using the guidance and
procedures provided in the final regula-
tions and these proposed regulations.
3. Impact of the Rules
The proposed regulations would
require certain applicable unincorporated
organizations to submit section 761(a)
elections in writing more frequently than
they otherwise would have (though no
more than once per year). In addition, a
specified applicable unincorporated orga-
nization will be responsible for identify-
ing any transactions involving ownership
interests therein. Applicable unincorpo-
rated organizations that make a section
761(a) election will have administrative
costs related to reading and understand-
ing the rules as well as recordkeeping and
reporting requirements. The costs will
vary across different-sized entities and
across the type of project(s) in which such
entities are engaged.
Although the Treasury Department
and the IRS do not have sufficient data
to determine precisely the likely extent
of the increased costs of compliance, the
estimated burdens of complying with the
recordkeeping and reporting requirements
are described in the Paperwork Reduction
Act section of the preamble.
4. Alternatives Considered
The Treasury Department and the IRS
considered alternatives to the proposed
regulations. For example, in adopting the
terminating transaction rules, the Trea-
sury Department and the IRS considered
requiring only the parties to a transaction
involving an interest in a specified applica-
ble unincorporated organization to report
such transaction. However, the Treasury
Department and the IRS decided that such
an option would increase the opportunity
for duplication, fraud, improper payments,
or excessive payments under section 6417.
Section 6417(d)(5) specifically authorizes

Bulletin No. 2024–50 1237 December 9, 2024
the IRS to require such information or reg-
istration as the Secretary deems necessary
for purposes of preventing duplication,
fraud, improper payments, or excessive
payments under section 6417 as a condi-
tion of, and prior to, any amount being
treated as a payment which is made by an
applicable entity under section 6417. As
described in the preamble to these pro-
posed regulations, these proposed rules
carry out that Congressional intent by
ensuring that every member of a specified
applicable unincorporated organization is
informed about all transactions involving
interests in the specified applicable unin-
corporated organization that could affect
the amount or owner of any payments
under section 6417.
Comments are requested on the require-
ments in the proposed regulations, includ-
ing specifically whether there are less bur-
densome alternatives that do not increase
the risk of duplication, fraud, improper
payments, or excessive payments under
section 6417.
IV. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandate
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 gov-
ernment, in the aggregate, or by the private
sector, of $100 million (updated annually
for inflation). These proposed regulations
do not include any Federal mandate that
may result in expenditures by State, local,
or Tribal governments or by the private
sector in excess of that threshold.
V. Executive Order 13132: Federalism
Executive Order 13132 (Federalism)
prohibits an agency from publishing any
rule that has federalism implications if
the rule either imposes substantial, direct
compliance costs on State and local gov-
ernments, and is not required by statute,
or preempts State law, unless the agency
meets the consultation and funding
requirements of section 6 of the Execu-
tive order. These proposed regulations do
not have federalism implications and do
not impose substantial, direct compliance
costs on State and local governments or
preempt State law within the meaning of
the Executive order.
VI. Executive Order 13175: Consultation
and Coordination With Indian Tribal
Governments
Executive Order 13175 (Consulta-
tion and Coordination With Indian Tribal
Governments) prohibits an agency from
publishing any rule that has Tribal impli-
cations if the rule either imposes substan-
tial, direct compliance costs on Indian
Tribal governments, and is not required
by statute, or preempts Tribal law, unless
the agency meets the consultation and
funding requirements of section 5 of the
Executive order. This proposed rule does
not have substantial direct effects on
one or more federally recognized Indian
tribes and does not impose substantial
direct compliance costs on Indian Tribal
governments within the meaning of the
Executive order.
Nevertheless, on April 5, 2024, the
Treasury Department and the IRS held a
consultation with Tribal leaders requesting
assistance in addressing questions related
to the section 761(a) proposed rules pub-
lished on March 11, 2024, which helped
inform the development of these proposed
regulations.
VII. Executive Order 14112: Reforming
Federal Funding and Support for Tribal
Nations To Better Embrace Our Trust
Responsibilities and Promote the Next
Era of Tribal Self-Determination
Executive Order 14112 (Reforming
Federal Funding and Support for Tribal
Nations to Better Embrace Our Trust
Responsibilities and Promote the Next
Era of Tribal Self-Determination) reaf-
firms the Executive Branch’s support
for Tribal self-determination as the most
effective policy for the economic growth
of Tribal Nations and the economic
well-being of Tribal citizens. Executive
Order 14112 requires agency heads to
take certain actions, consistent with appli-
cable law and to the extent practicable, to
increase access to “Federal funding and
support programs for Tribal Nations”;
provide Tribal Nations with the flexibility
to improve economic growth and address
the specific needs of their communities;
and reduce administrative burdens. Sec-
tion 2(b) of the Executive order defines
“Federal funding and support programs
for Tribal Nations” as including “fund-
ing, programs, technical assistance, loans,
grants, or other financial support or direct
services that the Federal Government pro-
vides to Tribal Nations or Indians because
of their status as Indians.” As section 1
of the Executive order explains, “As we
continue to support Tribal Nations, we
must respect their sovereignty by better
ensuring that they are able to make their
own decisions about where and how to
meet the needs of their communities. No
less than for any other sovereign, Tribal
self-governance is about the fundamental
right of a people to determine their own
destiny and to prosper and flourish on their
own terms.” These commitments build on
a recognition of principles of sovereignty,
sovereign immunity, and self-governance
that have been repeatedly reaffirmed by
the Supreme Court. See, e.g., Three Affil-
iated Tribes of the Fort Berthold Reser-
vation v. Wold Engineering, P.C., et al.,
476 U.S. 877, 890-91 (1986); Oklahoma
Tax Comm’n v. Citizen Band Potawatomi
Indian Tribe of Oklahoma, 498 U.S. 505,
510 (1991). The Treasury Tribal Advi-
sory Committee has advised that Tribes
consider “financial support” in Executive
Order 14112 to include tax matters that
range from tax credits to Federal tax rules
that regulate Tribal revenue.
Consistent with Executive Order
14112, the Treasury Department and the
IRS recognize the importance of protect-
ing and supporting Tribal sovereignty
and self-determination. These proposed
regulations are necessary for compliance
with sections 6417(d)(5) and (h) and do
not impose undue burdens on Tribal sov-
ereignty.
Comments and Public Hearing
Before these proposed regulations are
adopted as final regulations, consideration
will be given to comments regarding the
notice of proposed rulemaking that are
submitted timely to the IRS as prescribed
in the preamble under the “ADDRESSES”
section. The Treasury Department and the
IRS request comments on all aspects of
the proposed regulations. All comments

December 9, 2024 1238 Bulletin No. 2024–50
will be made available at https://www.
regulations.gov. Once submitted to the
Federal eRulemaking Portal, comments
cannot be edited or withdrawn.
A public hearing has been scheduled
for February 7, 2025, beginning at 10
a.m. EST, in the Auditorium at the Inter-
nal Revenue Building, 1111 Constitution
Avenue, NW., Washington, DC. Due to
building security procedures, visitors
must enter at the Constitution Avenue
entrance. In addition, all visitors must
present photo identification to enter the
building. Because of access restrictions,
visitors will not be admitted beyond the
immediate entrance area more than 30
minutes before the hearing starts. Partic-
ipants may alternatively attend the public
hearing by telephone.
The rules of 26 CFR 601.601(a)(3)
apply to the hearing. Persons who wish
to present oral comments at the hearing
must submit an outline of the topics to be
discussed and the time to be devoted to
each topic by January 21, 2025. A period
of ten minutes will be allocated to each
person for making comments. After the
deadline for receiving outlines has passed,
the IRS will prepare an agenda containing
the schedule of speakers. Copies of the
agenda will be available free of charge
at the hearing. If no outline of the topics
to be discussed at the hearing is received
by January 21, 2025, the public hearing
will be cancelled. If the public hearing is
cancelled, a notice of cancellation of the
public hearing will be published in the
Federal Register.
Individuals who want to testify in
person at the public hearing must send
an email to publichearings@irs.gov to
have your name added to the building
access list. The subject line of the email
must contain the regulation number REG-
116017-24 and the language “TESTIFY
In Person.” For example, the subject line
may say: Request to TESTIFY In Person
at Hearing for REG-116017-24.
Individuals who want to testify by
telephone at the public hearing must send
an email to publichearings@irs.gov to
receive the telephone number and access
code for the hearing. The subject line
of the email must contain the regulation
number REG-116017-24 and the language
“TESTIFY Telephonically.” For example,
the subject line may say: Request to TES-
TIFY Telephonically at Hearing for REG-
116017-24.
Individuals who want to attend the
public hearing in person without testify-
ing must also send an email to publichear-
ings@irs.gov to have your name added to
the building access list. The subject line
of the email must contain the regulation
number REG-116017-24 and the language
“ATTEND In Person.” For example, the
subject line may say: Request to ATTEND
Hearing In Person for REG-116017-24.
Requests to attend the public hearing must
be received by 5 p.m. EST on February 5,
2025.
Individuals who want to attend the pub-
lic hearing by telephone without testifying
must also send an email to publichear-
ings@irs.gov to receive the telephone
number and access code for the hearing.
The subject line of the email must con-
tain the regulation number REG-116017-
24 and the language “ATTEND Hearing
Telephonically.” For example, the subject
line may say: Request to ATTEND Hear-
ing Telephonically for REG-116017-24.
Requests to attend the public hearing must
be received by 5 p.m. EST on February 5,
2025.
Hearings will be made accessible to
people with disabilities. To request special
assistance during a hearing please contact
the Publications and Regulations Section
of the Office of Associate Chief Counsel
(Procedure and Administration) by send-
ing an email to publichearings@irs.gov
(preferred) or by telephone at (202) 317-
6901 (not a toll-free number) by 5 p.m.
EST on February 4, 2025.
Statement of Availability of IRS
Documents
IRS notices and other guidance cited in
this preamble are published in the Internal
Revenue Bulletin (or Cumulative Bulletin)
and are available from the Superintendent
of Documents, U.S. Government Publish-
ing Office, Washington, DC 20402, or by
visiting the IRS website at https://www.
irs.gov.
Drafting Information
The principal author of these proposed
regulations is Cameron Williamson of
the Office of Associate Chief Counsel
(Passthroughs and Special Industries).
However, other personnel from the Trea-
sury Department and the IRS participated
in their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and record-
keeping requirements.
Proposed Amendments to the
Regulations
Accordingly, the Treasury Department
and the IRS propose to amend 26 CFR
part 1 as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1, as amended in a final rule pub-
lished elsewhere in this issue of the Fed-
eral Register, effective January 19, 2025,
continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
* * * * *
Section 1.761-2 also issued under 26
U.S.C. 446(b), 761(a), 6031(a), 6417(d),
and 6417(h).
* * * * *
Par. 2. Section 1.761-2, as amended
in a final rule published elsewhere in this
issue of the Federal Register, effective
January 19, 2025, is further amended by:
a. Adding paragraphs (a)(4)(iv) and (a)
(5)(iv).
b. Revising the last sentence of para-
graph (b)(2)(i).
c. Revising the first sentence of para-
graph (b)(2)(ii).
d. Adding a sentence to the end of para-
graph (b)(3)(i).
e. Revising paragraph (f).
The additions and revisions read as fol-
lows:
§1.761-2 Exclusion of certain
unincorporated organizations from the
application of all or part of subchapter
K of chapter 1 of the Internal Revenue
Code.
(a) * * *
(4) * * *
(iv) Termination upon change in inter-
est—(A) In general. Except as provided in
paragraph (a)(4)(iv)(E) of this section, an

Bulletin No. 2024–50 1239 December 9, 2024
election under this paragraph (a) by a spec-
ified applicable unincorporated organiza-
tion (as defined in paragraph (a)(4)(iv)(C)
of this section) will terminate as the result
of a terminating transaction (as defined in
paragraph (a)(4)(iv)(D) of this section)
involving an interest in that organization.
Such termination will be effective begin-
ning on the first day of the taxable year
beginning after the hypothetical partner-
ship taxable year (as defined in paragraph
(a)(4)(iv)(B) of this section) in which the
terminating transaction occurred.
(B) Hypothetical partnership taxable
year. The term hypothetical partnership
taxable year means, with respect to a
specified applicable unincorporated orga-
nization, the period of time that would
have been the organization’s taxable year
if, after the taxable year with respect to
which the organization first made the elec-
tion under this paragraph (a), the organi-
zation continued to have taxable years and
such taxable years were determined by
reference to the taxable year required to
be used by the organization to make the
election.
(C) Specified applicable unincorpo-
rated organization. The term specified
applicable unincorporated organization
means an applicable unincorporated orga-
nization that has made an election under
this paragraph (a) and such election would
not be valid without the application of
either paragraph (a)(4)(iii)(A) or (B) of
this section.
(D) Terminating transaction. The term
terminating transaction means an acqui-
sition or disposition of an interest in a
specified applicable unincorporated orga-
nization (including transfers among mem-
bers of the organization), other than as the
result of a transfer between a disregarded
entity (as defined in §1.6417-1(f)) and its
owner.
(E) Exception. If a specified applica-
ble unincorporated organization meets
the requirements to make a new election
under this paragraph (a) and makes such an
election no later than the time that would
have been prescribed by §1.6031(a)-1(e)
(including extensions thereof) for filing
a partnership return with respect to the
hypothetical partnership taxable year in
which one or more terminating transac-
tions occurred, the organization’s election
will not terminate under paragraph (a)(4)
(iv)(A) of this section as a result of any
terminating transaction occurring during
that hypothetical partnership taxable year.
Such election must contain, in addition to
the information required by paragraph (b)
of this section, information about every
terminating transaction that occurred in
the hypothetical partnership taxable year,
including the parties thereto and the inter-
est(s) transferred.
(5) * * *
(iv) Example 4—
(A) Facts. The facts are the same as in paragraph
(a)(5)(ii)(A) of this section (Example 2), except that
T owns a 60% interest in TLLC and Y owns a 40%
interest in TLLC. TLLC’s first taxable year ends on
September 30th of year 1. On or before the 15th day
of the third month following that date, TLLC makes
a valid election under section 761(a) with respect to
year 1. On August 31 of year 3, T sells all of T’s
interest in TLLC to Q.
(B) Analysis. TLLC is a specified applicable
unincorporated organization. Accordingly, the sale
of T’s interest is a terminating transaction and will
terminate TLLC’s section 761(a) election unless
TLLC makes a new section 761(a) election on or
before the 15th day of the third month following
September 30th of year 3. This analysis would not
be different if, sometime between the end of TLLC’s
first taxable year and the hypothetical partnership
taxable year ending on September 30th of year 3,
TLLC’s taxable year would have changed under the
rules of subchapter K (for example, as a result of a
change in T’s taxable year).
(b) * * *
(2) * * *
(i) * * * Such partnership return must
contain the following information: the
name or other identification and the
address of the organization together with
information on the return, or in the state-
ment attached to the return, showing the
names, addresses, and taxpayer identifi-
cation numbers of all the members of the
organization; a statement that the orga-
nization qualifies under paragraph (a)
(1) of this section and either paragraph
(a)(2) or (3) of this section (taking into
account paragraph (a)(4) of this section,
as applicable); a statement that all of the
members of the organization elect that it
be excluded from all of subchapter K; a
statement indicating where a copy of the
agreement under which the organization
operates is available (or if the agree-
ment is oral, from whom the provisions
of the agreement may be obtained); and
all information required by the form and
instructions to the Form 1065 for an elec-
tion under paragraph (a) of this section.
(ii) * * * If an unincorporated organiza-
tion described in paragraph (a)(1) of this
section and either paragraph (a)(2) or (3)
of this section (but not a specified appli-
cable unincorporated organization) does
not make the election provided in sec-
tion 761(a) in the manner prescribed by
paragraph (b)(2)(i) of this section, it will
nevertheless be deemed to have made the
election if it can be shown from all the sur-
rounding facts and circumstances that it
was the intention of the members of such
organization at the time of its formation to
secure exclusion from all of subchapter K
beginning with the first taxable year of the
organization. * * *
(3) * * *
(i) * * * Application for permission to
revoke the election must be made by sub-
mitting a letter ruling request that com-
plies with the requirements of Rev. Proc.
2024-1 or successor guidance.
* * * * *
(f) Applicability date—(1) In general.
Except as provided in paragraphs (d) and
(f)(2) of this section, this section applies
to taxable years ending on or after March
11, 2024.
(2) Exceptions. Paragraphs (a)(4)(iv)
and (a)(5)(iv) of this section, the fifth sen-
tence of paragraph (b)(2)(i) of this section,
the first sentence of paragraph (b)(2)(ii) of
this section, and the last sentence of para-
graph (b)(3)(i) of this section, apply to
taxable years ending on or after Novem-
ber 20, 2024.
Heather C. Maloy,
Acting Deputy Commissioner.
(Filed by the Office of the Federal Register Novem-
ber 19, 2024, 8:45 a.m., and published in the issue
of the Federal Register for November 20, 2024, 89
FR 91617)

Bulletin No. 2024–50 i December 9, 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.

December 9, 2024 ii Bulletin No. 2024–50
Numerical Finding List
1
Bulletin 2024–50
Announcements:
2024-26, 2024-27 I.R.B. 14
2024-27, 2024-27 I.R.B. 14
2024-28, 2024-28 I.R.B. 39
2024-29, 2024-29 I.R.B. 71
2024-31, 2024-34 I.R.B. 533
2024-32, 2024-35 I.R.B. 535
2024-30, 2024-36 I.R.B. 581
2024-39, 2024-39 I.R.B. 639
2024-34, 2024-41 I.R.B. 758
2024-35, 2024-43 I.R.B. 1013
2024-36, 2024-44 I.R.B. 1073
2024-37, 2024-47 I.R.B. 1124
2024-38, 2024-50 I.R.B. 1230
2024-39, 2024-50 I.R.B. 1231
Notices:
2024-47, 2024-27 I.R.B. 1
2024-52, 2024-27 I.R.B. 2
2024-53, 2024-27 I.R.B. 4
2024-54, 2024-28 I.R.B. 24
2024-55, 2024-28 I.R.B. 31
2024-56, 2024-29 I.R.B. 64
2024-57, 2024-29 I.R.B. 67
2024-58, 2024-30 I.R.B. 120
2024-59, 2024-32 I.R.B. 348
2024-60, 2024-34 I.R.B. 515
2024-61, 2024-34 I.R.B. 520
2024-62, 2024-36 I.R.B. 570
2024-63, 2024-36 I.R.B. 573
2024-64, 2024-39 I.R.B. 632
2024-65, 2024-39 I.R.B. 633
2024-66, 2024-40 I.R.B. 682
2024-67, 2024-41 I.R.B. 726
2024-68, 2024-41 I.R.B. 729
2024-69, 2024-41 I.R.B. 733
2024-70, 2024-43 I.R.B. 1001
2024-72, 2024-43 I.R.B. 1005
2024-73, 2024-43 I.R.B. 1007
2024-71, 2024-44 I.R.B. 1026
2024-75, 2024-44 I.R.B. 1026
2024-74, 2024-45 I.R.B. 1089
2024-76, 2024-45 I.R.B. 1089
2024-77, 2024-45 I.R.B. 1093
2024-78, 2024-46 I.R.B. 1111
2024-80, 2024-47 I.R.B. 1120
2024-81, 2024-49 I.R.B. 1203
2024-83, 2024-49 I.R.B. 1206
2024-84, 2024-50 I.R.B. 1229
Proposed Regulations:
REG-124593-23, 2024-28 I.R.B. 40
REG-109032-23, 2024-31 I.R.B. 332
Proposed Regulations:—Continued
REG-120137-19, 2024-31 I.R.B. 336
REG-119283-23, 2024-32 I.R.B. 351
REG-102161-23 2024-33 I.R.B. 502
REG-103529-23, 2024-33 I.R.B. 512
REG-105128-23, 2024-35 I.R.B. 536
REG-108920-24, 2024-38 I.R.B. 607
REG-111629-23, 2024-39 I.R.B. 640
REG-106851-21, 2024-40 I.R.B. 684
REG-116787-23, 2024-40 I.R.B. 709
REG-119683-22, 2024-40 I.R.B. 716
REG-118269-23, 2024-41 I.R.B. 761
REG-112129-23, 2024-42 I.R.B. 787
REG-113628-21, 2024-44 I.R.B. 1074
REG-110878-24, 2024-47 I.R.B. 1125
REG-116017-24, 2024-50 I.R.B. 1232
Revenue Procedures:
2024-26, 2024-27 I.R.B. 7
2024-29, 2024-30 I.R.B. 121
2024-30, 2024-30 I.R.B. 183
2024-27, 2024-31 I.R.B. 300
2024-28, 2024-31 I.R.B. 326
2024-32, 2024-34 I.R.B. 523
2024-34, 2024-38 I.R.B. 604
2024-35, 2024-39 I.R.B. 638
2024-36, 2024-41 I.R.B. 737
2024-37, 2024-41 I.R.B. 755
2024-38, 2024-43 I.R.B. 1010
2024-33, 2024-44 I.R.B. 1030
2024-39, 2024-45 I.R.B. 1097
2024-40, 2024-45 I.R.B. 1100
2024-31, 2024-46 I.R.B. 1113
2024-41, 2024-47 I.R.B. 1122
Revenue Rulings:
2024-13, 2024-28 I.R.B. 18
2024-14, 2024-28 I.R.B. 18
2024-15, 2024-32 I.R.B. 340
2024-16, 2024-35 I.R.B. 534
2024-17, 2024-36 I.R.B. 568
2024-18, 2024-37 I.R.B. 584
2024-20, 2024-40 I.R.B. 646
2024-21, 2024-41 I.R.B. 724
2024-22, 2024-43 I.R.B. 980
2024-23, 2024-43 I.R.B. 981
2024-24, 2024-45 I.R.B. 1086
2024-25, 2024-49 I.R.B. 1181
2024-26, 2024-49 I.R.B. 1201
Treasury Decisions:
10002, 2024-29 I.R.B. 56
9999, 2024-30 I.R.B. 72
10000, 2024-31 I.R.B. 185
10003, 2024-32 I.R.B. 342
10001, 2024-33 I.R.B. 412
Treasury Decisions:—Continued
10004, 2024-33 I.R.B. 489
9998, 2024-34 I.R.B. 412
10005, 2024-34 I.R.B. 510
9991, 2024-40 I.R.B. 646
10007, 2024-43 I.R.B. 981
9994, 2024-44 I.R.B. 1014
10008, 2024-45 I.R.B. 1082
10011, 2024-48 I.R.B. 1177
10012, 2024-50 I.R.B. 1207
10013, 2024-50 I.R.B. 1220
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2024–27 through 2024–52 is in Internal Revenue Bulletin
2024–52, dated December 30, 2024.

Bulletin No. 2024–50 iii December 9, 2024
Finding List of Current Actions on
Previously Published Items
1
Bulletin 2024–50
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2024–27 through 2024–52 is in Internal Revenue Bulletin
2024–52, dated December 30, 2024.

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Washington, DC 20224
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