Notice 2014-81

2015 Standard Mileage
Rates
Notice 2014 –79
SECTION 1. PURPOSE
This notice provides the optional 2015
standard mileage rates for taxpayers to use
in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes. This notice also provides the
amount taxpayers must use in calculating
reductions to basis for depreciation taken
under the business standard mileage rate,
and the maximum standard automobile
cost that may be used in computing the
allowance under a fixed and variable rate
(FAVR) plan.
SECTION 2. BACKGROUND
Rev. Proc. 2010 –51, 2010 –51 I.R.B.
883, provides rules for computing the deductible costs of operating an automobile
for business, charitable, medical, or moving expense purposes, and for substantiating, under § 274(d) of the Internal Revenue Code and § 1.274 –5 of the Income
Tax Regulations, the amount of ordinary
and necessary business expenses of local
transportation or travel away from home.
Taxpayers using the standard mileage
rates must comply with Rev. Proc. 2010 –
51. However, a taxpayer is not required to
use the substantiation methods described
in Rev. Proc. 2010 –51, but instead may
substantiate using actual allowable expense amounts if the taxpayer maintains
adequate records or other sufficient evidence.
An independent contractor conducts an
annual study for the Internal Revenue Service of the fixed and variable costs of
operating an automobile to determine the
standard mileage rates for business, medical, and moving use reflected in this notice. The standard mileage rate for charitable use is set by § 170(i).
SECTION 3. STANDARD MILEAGE
RATES
The standard mileage rate for transportation or travel expenses is 57.5 cents per
mile for all miles of business use (busi-

Bulletin No. 2014 –53

ness standard mileage rate). See section 4
of Rev. Proc. 2010 –51.
The standard mileage rate is 14 cents
per mile for use of an automobile in rendering gratuitous services to a charitable
organization under § 170. See section 5 of
Rev. Proc. 2010 –51.
The standard mileage rate is 23 cents
per mile for use of an automobile (1) for
medical care described in § 213, or (2) as
part of a move for which the expenses are
deductible under § 217. See section 5 of
Rev. Proc. 2010 –51.
SECTION 4. BASIS REDUCTION
AMOUNT
For automobiles a taxpayer uses for
business purposes, the portion of the business standard mileage rate treated as depreciation is 22 cents per mile for 2011,
23 cents per mile for 2012, 23 cents per
mile for 2013, 22 cents per mile for 2014,
and 24 cents for 2015. See section 4.04 of
Rev. Proc. 2010 –51.
SECTION 5. MAXIMUM STANDARD
AUTOMOBILE COST
For purposes of computing the allowance under a FAVR plan, the standard
automobile cost may not exceed $28,200
for automobiles (excluding trucks and
vans) or $30,800 for trucks and vans. See
section 6.02(6) of Rev. Proc. 2010 –51.
SECTION 6. EFFECTIVE DATE
This notice is effective for (1) deductible transportation expenses paid or incurred on or after January 1, 2015, and (2)
mileage allowances or reimbursements
paid to an employee or to a charitable
volunteer (a) on or after January 1, 2015,
and (b) for transportation expenses the
employee or charitable volunteer pays or
incurs on or after January 1, 2015.
SECTION 7. EFFECT ON OTHER
DOCUMENTS
Notice 2013– 80 is superseded.
DRAFTING INFORMATION
The principal author of this notice is
Bernard P. Harvey of the Office of Associate Chief Counsel (Income Tax and Accounting). For further information on this

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notice contact Bernard P. Harvey on (202)
317-7005 (not a toll-free call).

Reallocation of Section 48B
Credits under the
Qualifying Gasification
Project Program
Notice 2014 – 81
SECTION 1. PURPOSE
Section 48B of the Internal Revenue
Code, as originally enacted by section
1307(b) of the Energy Policy Act of 2005,
Pub. L. 109 –58, 119 Stat. 1004 (August 8,
2005), provided for the first phase of the
qualifying gasification project program
and authorized $350 million of credits
(“the § 48B Phase I program” and “§ 48B
Phase I credits”). Section 48B, as
amended by section 112 of the Energy
Improvement and Extension Act of 2008,
Pub. L. 110 –343, 122 Stat. 3824 (October
3, 2008), provided for a second phase of
the qualifying gasification project program and authorized an additional $250
million of credits (“the § 48B Phase II
program” and “§ 48B Phase II credits”).
This notice establishes a third phase of
the qualifying gasification project program (“the § 48B Phase III program”) to
reallocate the § 48B Phase I credits that
are available for allocation after the conclusion of the § 48B Phase I program. The
procedures in this notice apply only to
§ 48B Phase I credits that were forfeited
and are available for reallocation as § 48B
Phase III credits.
To be considered in the § 48B Phase III
allocation round, applications must be
submitted to the Department of Energy
(“DOE”) and to the Internal Revenue Service (“Service”) on or before March 2,
2015. See section 5 of this notice for additional rules regarding these applications.
SECTION 2. BACKGROUND
.01 Section 46 provides that the
amount of the investment credit for any
taxable year is the sum of the credits listed
in § 46. That list includes the qualifying
gasification project credit under § 48B.
.02 Section 48B(d)(1) provides that the
Secretary, in consultation with the Secretary of Energy, shall establish a qualifying

December 29, 2014

gasification project program to consider
and award certifications for qualified investment eligible for credits to qualifying
gasification project sponsors under § 48B.
The Treasury Department and the Service,
in consultation with the Secretary of Energy, established the § 48B Phase I program in Notice 2006 –25, 2006 –1 C.B.
609, as modified and updated by Notice
2007–53, 2007–1 C.B. 1474.
.03 Under the § 48B Phase I program,
the qualifying gasification project credit
for a taxable year was an amount equal to
20 percent of the qualified investment (as
defined in § 48B(b)) for that taxable year
in qualifying gasification projects (as defined in § 48B(c)(1)) for which the credit
was allocated under § 48B(d)(1)(A).
.04 The term “qualified investment” is
defined in § 48B(b) as the basis of eligible
property placed in service by the taxpayer
during such taxable year which is part of a
qualifying gasification project (A) the
construction, reconstruction, or erection
of which is completed by the taxpayer, or
which is acquired by the taxpayer if the
original use of such property commences
with the taxpayer, and (B) with respect to
which depreciation (or amortization in
lieu of depreciation) is allowable. Pursuant to § 48B(b)(2) and (3), rules regarding
certain subsidized property similar to
§ 48(a)(4) (without regard to § 48(a)(4)(D))
and rules regarding certain qualified progress expenditures similar to § 46(c)(4) and
(d) (as in effect on the day before the enactment of the Revenue Reconciliation Act of
1990) apply for purposes of § 48B.
.05 The term “qualifying gasification
project” is defined in § 48B(c)(1) as any
project that (A) employs gasification technology, (B) will be carried out by an eligible entity (as defined in section 3.02 of
this notice), and (C) includes a qualified
investment of which an amount not to
exceed $650 million is certified under the
qualifying gasification program as eligible
for credit under § 48B. Pursuant to
§ 48B(c)(2), gasification technology is
any process that converts a solid or liquid
product from coal (as defined in section
3.01 of this notice), petroleum residue (as
defined in § 48B(c)(8)), biomass (as defined in § 48B(c)(4)), or other materials
that are recovered for their energy or feedstock value into a synthesis gas composed
primarily of carbon monoxide and hydro-

December 29, 2014

gen for direct use or subsequent chemical
or physical conversion.
.06 Pursuant to § 48B(d)(1)(A), the
§ 48B Phase I program provided for $350
million of credits to be allocated to qualifying gasification projects. The § 48B
Phase I program under Notice 2006 –25
and Notice 2007–53 provided for annual
allocation rounds. The initial allocation
round was conducted in 2006. An additional allocation round was conducted in
2007– 08. The entire § 48B Phase I credit
amount of $350 million was allocated in
these two allocation rounds.
.07 Under the § 48B Phase II program,
the qualifying gasification project credit
for a taxable year was an amount equal to
30 percent of the qualified investment (as
defined in § 48B(b)) for that taxable year
in qualifying gasification projects (as defined in § 48B(c)(1)) for which the credit
is allocated under § 48B(d)(1)(B).
.08 Pursuant to § 48B(d)(1)(B), the
§ 48B Phase II program provided for $250
million of credits to be allocated to qualifying gasification projects that include
equipment which separates and sequesters
at least 75 percent of such project’s total
carbon dioxide (CO2) emissions. The Service established the § 48B Phase II program in Notice 2009 –23, 2009 –1 C.B.
802, which provided for an allocation
round in 2009 –2010. The entire § 48B
Phase II credit amount of $250 million
was allocated in this allocation round.
.09 As originally enacted by the Energy Policy Act of 2005, § 48B(d)(1) directed the Secretary to carry out a certification program for the allocation of § 48B
credits and authorized the Secretary to
establish additional programs to reallocate
§ 48B credits by providing that allocations
were to be made “under rules similar to
the rules of section 48A(d)(4).” Although
the Energy Improvement and Extension
Act of 2008 amended § 48B(d)(1) and
removed the cross-reference to § 48A(d)(4),
the effective date provision of the 2008
amendment states that it “appl[ies] to
credits described in Code section
48B(d)(1)(B) . . . which are allocated or
reallocated after the date of enactment
[October 3, 2008].” Thus, by its terms, the
2008 amendment was not intended to impact the program for the credits initially
allocated as § 48B Phase I credits, and
which pursuant to the statute as revised by

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the 2008 amendment are described in
§ 48B(d)(1)(A). Accordingly, the authority to reallocate § 48B Phase I credits
remains effective, and the Service may
review prior § 48B Phase I allocations and
conduct an additional certification program for any § 48B Phase I credits that are
available for reallocation. Moreover, by
referring to § 48(d)(1)(B) credits that are
“allocated or reallocated” after the October 3, 2008, date of enactment, the effective date provision of the 2008 amendment indicates congressional support for
reallocation of § 48B credits. The Service
has completed its review of the prior
§ 48B Phase I allocations and has determined that § 48B Phase I credits in the
total amount of $ 309,337,000 are available for reallocation under the § 48B
Phase III program.
.10 Pursuant to § 48B(d)(2), certificates of eligibility may be issued under
the § 48B program only during the 10year period beginning on October 1, 2005.
As a result, the Service may only reallocate any available § 48B credits prior to
October 1, 2015.
.11 Under the § 48B Phase III credit
program, the qualifying gasification project credit for a taxable year is an amount
equal to 20 percent of the qualified investment (as defined in § 48B(b)) for that
taxable year in qualifying gasification
projects (as defined in § 48B(c)(1)) for
which the credit is allocated under
§ 48B(d)(1)(A).
.12 Section 48B(d)(4) provides that (A)
highest priority is given to projects with
the greatest separation and sequestration
percentage of total CO2 emissions, and
(B) high priority is given to applicant participants who have a research partnership
with an eligible educational institution (as
defined in § 529(e)(5)). While the capability of a qualifying project to separate
and sequester CO2 emissions is considered in ranking projects, the § 48B Phase
III program will not require a qualifying
project to include equipment that separates and sequesters CO2 emissions.
.13 Section 48A(d)(5) provides that the
Secretary shall, upon making a certification under § 48B(d), publicly disclose the
identity of the applicant and the amount of
the credit certified with respect to such
applicant.

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.14 Section 48A(h) directs the Secretary to modify the terms of any competitive certification award under § 48B and
any associated closing agreement where
such modification (i) is consistent with the
objectives of § 48B, (ii) is requested by
the recipient, and (iii) involves moving the
project site to improve the potential to
capture and sequester CO2 emissions, reduce costs of transporting feedstock, and
serve a broader customer base. This directive does not apply if the Secretary determines that the dollar amount of tax credits
available to the taxpayer under § 48B
would increase as a result of the modification or such modification would result
in such project not being originally certified. In addition, the Secretary is required
to consult with other relevant Federal
agencies, including the Department of Energy, in considering any modification under § 48A(h).
.15 The at-risk rules in § 49 and the
recapture and other special rules in § 50
apply to the § 48B Phase III credit. Generally, section 49 provides that the investment credit is limited to the extent that the
taxpayer is at risk with respect to the
investment credit property. Section 50(a)
provides for pro rata recapture of the investment tax credit if the investment
credit property is disposed of, or otherwise ceases to be investment credit property, within five years after the property is
placed in service.
SECTION 3. DEFINITIONS
The following definitions apply for
purposes of § 48B and this notice:
.01 Coal. Section 48B(c)(6) defines the
term “coal” as anthracite, bituminous
coal, subbituminous coal, lignite, and
peat. Coal includes waste coal (that is,
usable material that is a byproduct of the
previous processing of anthracite, bituminous coal, subbituminous coal, lignite, or
peat). Examples of waste coal include fine
coal of any of the listed ranks, coal of any
of the listed ranks obtained from a refuse
bank or slurry dam, anthracite culm, bituminous gob, and lignite waste.
.02 Eligible entity. Section 48B(c)(7)
defines “eligible entity” as any person
whose application for certification is principally intended for use in a domestic
project that employs domestic gasification
applications related to chemicals, fertiliz-

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ers, glass, steel, petroleum residues, forest
products, agriculture, including feedlots
and dairy operations, and transportation
grade liquid fuels (qualifying industries).
For purposes of § 48B, a qualifying gasification project is carried out by an eligible entity if the project supplies more than
50 percent of the thermal output in British
thermal units (“Btu”) from the gasification process in the form of synthesis gas
for direct use or subsequent chemical or
physical conversion in an application
related to one or more qualifying industries or if more than 50 percent of the
fuel input in Btu to the gasification process is supplied from one or more qualifying industries.
.03 Total synthesis gas capacity. The
total synthesis gas capacity of a project is
the total MMBtu (one million Btu) per
hour of the synthesis gas (higher heating
value (HHV)) at the gasifier outlet of the
project. The synthesis gas must be composed primarily of carbon monoxide and
hydrogen for direct use or subsequent
chemical or physical conversion.
.04 Fuel Input.
(1) In general. The term “fuel input”
means, with respect to any type of fuel,
the amount of such fuel used during normal plant operations. The amounts of the
fuel used are measured (i) in Btu on an
energy input basis and (ii) pursuant to
applicable standards prescribed by the
American Society for Testing and Materials
(“ASTM”). For example, § 48B(d)(3)(D)
provides that the fuels identified in
§ 48B(c)(2) will at all times cumulatively
comprise at least 90 percent of the total
fuels (fuels identified in § 48B(c)(2) and
any other fuel input) required by the project. This requirement is satisfied if, after
completion and during normal plant operations, the fuels identified in § 48B(c)(2)
will cumulatively comprise at least 90
percent of the project’s total fuels measured in Btu on an energy input basis
and pursuant to applicable ASTM standards.
(2) Only normal plant operations taken
into account. Only fuel used during normal plant operations is taken into account
for purposes of § 48B. Normal plant operations are operations other than during
periods of initial plant certification, plant
startup, plant shutdown, interconnected

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gasifier(s) shutdown for gasification system maintenance, or interruptions of the
supply of fuels identified in § 48B(c)(2) to
the project resulting from an event of
force majeure (including an act of God,
war, strike, or other similar event beyond
the control of the taxpayer). For example,
the fuel input during the initial plant certification may consist entirely of natural
gas or other fuels not identified in
§ 48B(c)(2) because fuel used during initial plant certification is disregarded in
determining whether the requirement of
§ 48B(d)(3)(D) to use 90 percent of the
fuels identified in § 48B(c)(2) is satisfied.
.05 Placed In Service. For purposes of
§ 48B, property is placed in service in the
taxable year in which the property is
placed in a condition or state of readiness
and availability for a specifically assigned
function. See § 1.46 –3(d)(1)(ii) of the Income Tax Regulations. Thus, a qualifying
gasification project or eligible property (as
defined in § 48B(c)(3)) that is a part of the
project is placed in service in the taxable
year in which the project is placed in a
condition or state of readiness and availability for producing synthesis gas from
the feedstocks identified in § 48B(c)(2).
.06 Separation and Sequestration. The
term “separation and sequestration” refers
to the separation and capture of a project’s
CO2 emissions, and the placement of the
captured CO2 into a repository in which
the CO2 will remain permanently sequestered.
SECTION 4. SECTION 48B PHASE III
PROGRAM
.01 In General. To be considered in the
§ 48B Phase III allocation round, applications must be submitted separately to
DOE and to the Service on or before
March 2, 2015 pursuant to section 5 of
this notice. The Service will consider a
project under the § 48B Phase III program
only if DOE provides a certification
(“DOE certification”) and ranking (if any)
for the project. Accordingly, a taxpayer
must submit, for each § 48B Phase III
gasification project: (i) an application for
certification by DOE that the project is
technically and economically feasible
(“application for DOE certification”), and
(ii) an application for certification by the
Service under § 48B(d) (“application for
§ 48B certification”).

December 29, 2014

.02 Program Specifications.
(1) The Service determines the amount
of the § 48B Phase III credits allocated to
a project at the time the Service accepts
the application for § 48B certification for
that project in accordance with section
4.02(9) of this notice (see section 5 of this
notice for the requirements applicable to
the application for DOE certification and
the application for § 48B certification).
(2) The § 48B Phase III credit for a
taxable year is an amount equal to 20
percent of the qualified investment (as defined in § 48B(b)) for that taxable year in
qualifying gasification projects (as defined
in § 48B(c)(1)).
(3) Section 48B Phase III credits in the
amount of $ 309,337,000 are available for
the § 48B Phase III allocation round. Under § 48B(c)(1)(C), the certification for a
§ 48B Phase III project cannot apply to
more than $650 million of the qualified
investment in the project. Thus, the maximum amount of the § 48B Phase III
credit that will be allocated to a project is
$130 million. This limitation applies to a
qualifying project rather than to the taxpayer holding interests in the project.
Therefore, the number or type of entities
holding ownership interests in a project
does not change the maximum amount of
the § 48B Phase III credit that may be
allocated to that project. However, a taxpayer holding interests in multiple projects may be allocated more than the maximum § 48B Phase III credit that may be
allocated to a single project.
(4) A taxpayer that was allocated § 48B
Phase I credits or § 48B Phase II credits
for a project may submit an application
for § 48B Phase III credits for the same
project if the project meets the requirements for a qualifying project under the
§ 48B Phase III gasification program.
(a) Section 48B Phase III credits will
be allocated to the taxpayer’s qualified
investment in the project only to the extent such investment exceeds the qualified
investment with respect to which § 48B
Phase I credits or § 48B Phase II credits
was awarded but does not exceed $650
million. Thus, if the qualified investment
in a project is $700 million and § 48B
Phase I credits were allocated with respect
to $500 million of the qualified investment, § 48B Phase III credits may be

December 29, 2014

allocated with respect to only $150 million ($650 million ⫺ $500 million) of the
qualified investment. Any § 48B Phase I
or Phase II credits allocated to a project
are not taken into account for purposes of
determining the $650 million qualified investment limitation to the extent the right
to claim such credit has been irrevocably
waived in such manner as the Commissioner may require.
(b) Section 48B Phase III credits allocated to a project will be forfeited if the
taxpayer fails to place the project in service within 7 years of the date of acceptance of the application for § 48B certification under section 4.02(9) of this notice.
The allocation of § 48B Phase III credits
does not delay the taxpayer’s placed in
service obligations with respect to any
§ 48B Phase I credits or § 48B Phase II
credits previously allocated to the project.
Accordingly, any § 48B Phase I credits or
§ 48B Phase II credits allocated to the
project will be forfeited if the taxpayer
fails to place the project in service within
7 years of the date of acceptance of the
application for § 48B certification under
the applicable program.
(5) For § 48B Phase III credits, DOE
will determine the technical and economic
feasibility of the project and, if the project
is determined to be feasible, will provide a
DOE certification for the project to the
Service. DOE will rank the certified projects based on the Program Policy Factors
specified in Appendix B, and the Service
will allocate the credits as follows:
(a) If the requested allocation of credit
for projects that DOE has certified does
not exceed the amount available for allocation, each certified project will be allocated the full amount of credit requested.
(b) If the requested allocation of credit
for projects that DOE has certified exceeds the amount available for allocation,
the amount available for allocation will be
allocated as follows:
(i) The project receiving the highest
ranking (that is, first) will be allocated the
full amount of credit requested (but not
exceeding the amount available for allocation) before any credit is allocated to a
lower-ranked project. The amount available for allocation is reduced by the
amount of credit so allocated and only the
remainder is available for allocation to a
lower-ranked project.

1004

(ii) Second and lower-ranked projects
will be entitled to similar priority in the
allocation of credit and allocations to such
projects will similarly reduce the remainder of the amount available for allocation
until the amount available for allocation is
exhausted.
(6) See section 5.02 of this notice and
Appendix B to this notice for the information to be submitted to the DOE in an
application for DOE certification. Appendix B to this notice also provides the instructions and address for filing the application for DOE certification. If an
application for DOE certification is postmarked on or before March 2, 2015, DOE
will determine the feasibility of the project and (for projects determined to be feasible) provide DOE certification and DOE
ranking (if any) to the Service by July 1,
2015.
(7) For the § 48B Phase III allocation
round, the application period for § 48B
certification begins on December 29,
2014, and ends on March 2, 2015, and any
completed application for § 48B certification received by the Service after December 28, 2014, and on or before March 2,
2015, will be deemed to be submitted by
the taxpayer on March 2, 2015.
(8) For purposes of determining the
timeliness of submission of applications
the rules of § 7502 shall apply.
(9) By September 1, 2015, the Service
will accept or reject the taxpayer’s application for § 48B certification and will
notify the taxpayer, by letter, of its decision. This acceptance letter constitutes a
certificate of eligibility provided by the
Service pursuant to § 48B(d)(2).
(10) If the taxpayer’s application for
§ 48B certification is accepted, the acceptance letter will state the amount of the
credit allocated to the project. If a credit is
allocated to a taxpayer’s project, the taxpayer will be required to execute an agreement in the form set forth in Appendix A
to this notice. By November 2, 2015, the
taxpayer must execute and return the
agreement to the Service at the appropriate address listed in section 5.04 of this
notice. The Service will execute and return the agreement to the taxpayer by February 1, 2016. The executed agreement
applies only to the accepted taxpayer. The
taxpayer must notify the Service within 90

Bulletin No. 2014 –53

days of the acquisition of the project by
any other person (a successor in interest).
(11) A successor in interest that plans
to claim the § 48B credit allocated to the
project must request permission to execute a new agreement with the Service. If
the request is granted, the new agreement
must be executed no later than the due
date (including extensions) of the successor in interest’s Federal income tax return
for the taxable year in which the transfer
occurs. If the successor in interest does
not execute a new agreement, the following rules apply:
(a) In the case of an interest acquired at
or before the time the qualifying gasification project is placed in service, any credit
allocated to the project will be fully forfeited (and rules similar to the recapture
rules of § 50(a) apply with respect to
qualified progress expenditures); and
(b) In the case of an interest acquired
after the qualifying gasification project is
placed in service, the project ceases to be
investment credit property and the recapture rules of § 50(a) (and similar rules
with respect to qualified progress expenditures) apply.
(12) The site of the qualifying gasification project relating to a credit allocation may be changed only if the change is
consistent with the objectives of the qualifying gasification project program, is requested by the taxpayer that received the
credit allocation, and involves moving the
project site to improve the potential to
capture and sequester CO2 emissions, reduce costs of transporting feedstock, and
serve a broader customer base. The Service will not agree to a project site change
if the dollar amount of tax credits allocated to the taxpayer under § 48B would
increase as a result of the site change or if
the project would not have been originally
certified had such modification been included in the taxpayer’s application. In
considering such modification, the Service will consult with DOE and any other
relevant Federal agency.
(13) The § 48B Phase III credit allocated to the project will be forfeited if the
taxpayer fails to place the project in service within 7 years from the date of the
acceptance letter under section 4.02(9) of
this notice.
(14) The taxpayer must notify the Service by letter of the date the project is

Bulletin No. 2014 –53

placed in service within 90 days of that
date.
SECTION 5. APPLICATIONS FOR
CERTIFICATIONS
.01 In General. An application for
§ 48B certification and a separate application for DOE certification must be submitted for each qualifying gasification project. If an application for DOE certification
does not include all of the information
required by section 5.02 of this notice,
DOE may decline to accept the application. If an application for § 48B certification does not include all of the information listed in section 5.03 of this notice the
Service may decline to accept the application.
.02 Information Required in the Application for DOE Certification. An application for DOE certification must be sent to
the address specified in Section C of Appendix B. The application must include all
of the information requested in Appendix
B to this notice and all of the following:
(1) The name, address, and taxpayer
identification number of the taxpayer. If
the taxpayer is a member of an affiliated
group filing consolidated returns, also provide the name, address, and taxpayer identification number of the common parent of
the group.
(2) The name and telephone number of
a contact person.
(3) The name and address (or other
unique identifying designation) of the
qualifying gasification project.
(4) A statement specifying the projected placed in service date of the qualifying gasification project.
(5) The estimated total cost of the project and the estimated total qualified investment in the eligible property that will
be part of the project.
(6) The amount of the qualifying gasification project credit requested for the
project. The amount requested must not
exceed $130 million (the amount permitted under § 48B(a) and (c)(1)(C)).
(7) The exact total synthesis gas capacity (as defined in section 3.03 of this notice) of the project.
(8) A statement specifying whether the
project is entitled to highest priority for
the percentage of total CO2 emissions that
the project will separate and sequester.

1005

(9) A statement specifying whether the
project is entitled to high priority for having a research partnership with an eligible
educational institution (as defined in
§ 529(e)(5)) and, if entitled to priority, a
statement identifying the eligible educational institution, stating the name(s) of
the eligible institution.
(10) The following declaration: “Under
penalties of perjury, I declare that I have
examined this submission, including accompanying documents, and, to the best
of my knowledge and belief, all of the
facts contained herein are true, correct,
and complete.”
(11) The taxpayer’s signature. The taxpayer must sign and date the application,
including the perjury declaration. A
stamped, faxed, or electronic signature
will not be accepted. The person signing
for the taxpayer must have personal
knowledge of the facts. Further, the application, including the perjury declaration,
must be signed by a person authorized
under state law to bind the taxpayer, such
as an officer on behalf of a corporation, a
general partner on behalf of a state-law
partnership, a member-manager on behalf
of a limited liability company, a trustee on
behalf of a trust, or the proprietor in the
case of a sole proprietorship. If the taxpayer is a member of an affiliated group
filing consolidated returns, the application, including the perjury declaration,
must be signed by a duly authorized officer of the common parent of the group.
.03 Information to be Included in the
Application for § 48B Certification. An
application for § 48B certification must
include all of the following:
(1) The name, address, and taxpayer
identification number of the taxpayer. If
the taxpayer is a member of an affiliated
group filing consolidated returns, also provide the name, address, and taxpayer identification number of the common parent of
the group.
(2) The name and/or number of the IRS
form that the taxpayer uses to file its Federal income tax return (e.g., Forms 1120,
1065) and the ending month of the taxpayer’s tax year.
(3) The name, telephone number, and
fax number of a contact person. For such
person, attach a properly executed power
of attorney, preferably on Form 2848,

December 29, 2014

Power of Attorney and Declaration of
Representative.
(4) One electronic version on a USB
flash drive or a CD of the completed application for DOE certification submitted
with respect to the project in accordance
with section 5.02 of this notice.
(5) If § 48B Phase I credits or § 48B
Phase II credits were allocated to the project, the estimated total cost and estimated
total qualifying investment of the project
as represented in the application for the
§ 48B Phase I credits or § 48B Phase II
credits, and the amount of the allocated
§ 48B Phase I credits or § 48B Phase II
credits.
(6) The following declaration: “Under
penalties of perjury, I declare that I have
examined this submission, including accompanying documents, and, to the best of
my knowledge and belief, all of the facts contained herein are true, correct, and complete.”
(7) The taxpayer’s signature. The taxpayer must sign and date the application,
including the perjury declaration. A
stamped, faxed, or electronic signature
will not be accepted. The person signing
for the taxpayer must have personal
knowledge of the facts. Further, the application, including the perjury declaration,
must be signed by an officer on behalf of
a corporation, a general partner on behalf
of a state-law partnership, a membermanager on behalf of a limited liability
company, a trustee on behalf of a trust, or
the proprietor in the case of a sole proprietorship. If the taxpayer is a member of an
affiliated group filing consolidated returns, the application, including the perjury declaration, must be signed by a duly
authorized officer of the common parent
of the group.
.04 Instructions and Address for Filing
§ 48B Application. There is no user fee for
these applications. The application for
§ 48B certification meeting the requirements of section 5.03 of this notice should
be marked: “SECTION 48B APPLICATION FOR CERTIFICATION.” A taxpayer may submit the application to:
Internal Revenue Service
Industry Director, Natural Resources
and Construction
Attn: Executive Assistant (Technical)
1919 Smith Street, Floor P2
Stop 1000-HOU
Houston, TX 77002

December 29, 2014

If hand delivered, the application may
be delivered Monday through Friday between the hours of 8 a.m. and 4 p.m.
central time.
SECTION 6. OTHER
REQUIREMENTS
.01 Significant Change in Plans. The
Service must be informed if the plans for
the project change in any significant respect from the plans set forth in the applications for § 48B and DOE certification.
Except as otherwise provided under
§ 48A(h) and section 2.14 of this notice,
any significant change to the plans set
forth in the applications will have the
following effects if the Service is informed of the change after the date on
which the application for DOE certification was due for the § 48B Phase III
allocation round under section 4.02(6)
of this notice:
(1) The Service will give no further
consideration to the project if acceptance
has not yet been granted; and
(2) Any acceptance provided by the
Service and any allocation or certification
based on that acceptance will be void.
.02 Recapture of § 48B Phase III credits. Section 48B Phase III credits are subject to the recapture rules of § 50. Section
50(a)(1) provides, generally, for recapture
of the investment credit if, during any
taxable year, investment tax credit property is disposed of or otherwise ceases to
be investment credit property with respect
to the taxpayer before the close of the
recapture period. The recapture period under § 50(a) is the 5-year period beginning
on the date the property is placed in service.
.03 Effect of an Acceptance, Allocation, or Certification. An acceptance, allocation, or certification by the Service
under this notice is not a determination
that a project qualifies for the qualifying
gasification project credit under § 48B.
The Service may, upon examination, determine that the project does not qualify
for this credit.
.04 No Right to a Conference or Appeal. A taxpayer does not have a right to
a conference relating to, or a right of appeal with respect to, any decision made
under this notice (including the acceptance or rejection of the application for
DOE or § 48B certification, the amount of

1006

credit allocated to a project, or whether or
not to certify a project) to any official of
the Service.
.05 DOE Debriefings. Although a taxpayer does not have a right to a conference relating to any matters under this
notice, DOE will offer debriefings to all
applicants that submitted an application
for DOE certification. This debriefing will
be held by DOE after the Service has
accepted the applications for § 48B certification (as determined under this notice).
The sole purpose of the debriefing is to
enable applicants to develop better proposals in future allocation rounds, if any,
by providing DOE’s assessment of the
strengths and weaknesses of their applications for DOE certification. All requests for debriefings must be submitted
to DOE within 30 days of receipt of the
Service’s decision to accept or reject the
application.
SECTION 7. REDUCTION OR
FORFEITURE OF ALLOCATED
CREDITS
Under the provisions of this notice and
the agreement set forth in Appendix A to
this notice, the § 48B Phase III credits
allocated under section 4 of this notice
will be reduced or forfeited in certain situations. A taxpayer must notify the Service of the amount of any required reduction or forfeiture required under the
agreement. This notification must be sent
to the appropriate address listed in section
5.04 of this notice.
SECTION 8. QUALIFIED PROGRESS
EXPENDITURES
.01 Section 48B(b)(3) provides that
rules similar to the rules of § 46(c)(4) and
(d) (as in effect on the day before the
enactment of the Revenue Reconciliation
Act of 1990) shall apply for purposes of
§ 48B. Former §§ 46(c)(4) and 46(d) provided the rules for claiming the investment credit on qualified progress expenditures (as defined in former § 46(d)(3))
made by a taxpayer during the taxable
year for the construction of progress expenditure property (as defined in former
§ 46(d)(2)).
.02 In the case of self-constructed property (as defined in former § 46(d)(5)(A)),
former § 46(d)(3)(A) defined qualified prog-

Bulletin No. 2014 –53

ress expenditures to mean the amount that is
properly chargeable (during the taxable
year) to capital account with respect to that
property. With respect to a qualifying gasification project that is self-constructed
property, amounts paid or incurred are
chargeable to capital account at the time and
to the extent they are properly includible in
computing basis under the taxpayer’s
method of accounting (for example, after
applying the requirements of § 461, including the economic performance requirement
of § 461(h)).
.03 To claim the qualifying gasification
project credit for the qualified progress
expenditures paid or incurred by a taxpayer during the taxable year for construction of a qualifying gasification project,
the taxpayer must make an election under
the rules set forth in § 1.46 –5(o) of the
Income Tax Regulations. The taxpayer
may not make the qualified progress expenditures election for a qualifying gasification project until the taxpayer has received an acceptance letter for the project
under section 4.02(9) of this notice.
.04 If a taxpayer makes the qualified
progress expenditures election pursuant to
section 8.03 of this notice, rules similar to
the recapture rules in § 50(a)(2)(A)–(D)
apply. In addition to the cessation events
listed in § 50(a)(2)(A), examples of other
events that will cause the project to cease
being a qualifying gasification project are:
(1) Failure to place the project in service within 7 years from the date of the
acceptance letter under section 4.02(9) of
this notice; or
(2) A significant change to the plans for
the project as set forth in the applications
for § 48B and DOE certification if, under
section 6.01 of this notice, the Service’s
acceptance of the project is void as a
result of the change.
SECTION 9. DISCLOSURE OF
INFORMATION
.01 Announcement. Section 48A(d)(5)
provides that the Secretary shall, upon
making a certification under § 48A(d) and
§ 48B(d), publicly disclose the identity of
the applicant and the amount of the credit
allocated to such applicant. Accordingly,
the Service intends to publish the results
of the allocation process, and disclose the
following return information in the event
§ 48B Phase III credits are allocated to the

Bulletin No. 2014 –53

taxpayer’s project: (i) the name of the
taxpayer and (ii) the amount of § 48B
Phase III credits allocated to the project.
.02 In general. Any taxpayer associated information provided to or received,
recorded, collected or prepared by the Service as part of this process is return information under § 6103. Unless authorized
under the Internal Revenue Code, such as
the authorization under § 48A(d)(5), return information may not be disclosed.
This prohibition on disclosure, in conjunction with 5 U.S.C. § 552(b)(3), exempts return information from being provided under the Freedom of Information
Act (“FOIA”). Other FOIA exemptions
may also apply. For example, FOIA includes exemptions for trade secrets and
commercial or financial information under 5 U.S.C. § 552(b)(4) and exempts
personal information under 5 U.S.C.
§ 552(b)(6).
.03 FOIA requests. Anyone interested
in submitting a request for records under
the FOIA with respect to the qualifying
gasification project program under § 48B
should direct a request that conforms to
the Service’s FOIA regulations found at
26 C.F.R. § 601.702, to the following
address:
IRS FOIA Request
Baltimore Disclosure Office
Room 940
31 Hopkins Plaza
Baltimore, MD 21201
SECTION 10. EFFECT ON OTHER
DOCUMENTS
Notice 2009 –23 is amplified.

less the collection of information displays
a valid OMB control number.
The collections of information in this
notice are in sections 4, 5, 6, 7, and 8 and
Appendix B of this notice. This information is required to obtain an allocation of
the qualifying gasification project credit.
This information will be used by the Service to verify that the taxpayer is eligible
for the qualifying gasification project
credit. The collection of information is
required to obtain a benefit. The likely
respondents are business or other forprofit institutions.
The estimated total annual reporting
burden is 1,700 hours.
The estimated annual burden per respondent varies from 50 to 125 hours,
depending on individual circumstances,
with an estimated average of 85 hours. The
estimated number of respondents is 20.
The estimated annual frequency of responses is on occasion.
Books or records relating to a collection of information must be retained as
long as their contents may become material in the administration of any internal
revenue law. Generally, tax returns and
tax return information are confidential, as
required by § 6103.
SECTION 13. DRAFTING
INFORMATION
The principal author of this notice is
Jennifer C. Bernardini of the Office of
Associate Chief Counsel (Passthroughs &
Special Industries). For further information regarding this notice contact Ms. Bernardini on (202) 317-6853 (not a toll-free
call).

SECTION 11. EFFECTIVE DATE
APPENDIX A
This notice is effective on December
29, 2014.
SECTION 12. PAPERWORK
REDUCTION ACT
The collection of information contained in this notice has been reviewed
and approved by the Office of Management and Budget in accordance with the
Paperwork Reduction Act (44 U.S.C.
§ 3507) under control number 1545-2002.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information un-

1007

AGREEMENT
[Insert taxpayer’s name, address, and
identifying number] (“Taxpayer”) and the
Commissioner of Internal Revenue
(“Commissioner”) make the following
Agreement:
WHEREAS:
1. On or before [insert date and year],
Taxpayer submitted to the Internal Revenue Service (“Service”), an application for
certification under the § 48B Phase III

December 29, 2014

program described in Notice 2014 – 81
(“Application for § 48B Certification”);
2. Taxpayer’s application for § 48B
certification is for the qualifying gasification project (the “Project”) described below—
(a) The name of the Project is [insert
name as provided in Taxpayer’s application];
(b) The Project will be located in or
near [insert city and state];
(c) The Project site in subsection (b)
above may be changed only if the change
is consistent with the objectives of the
qualifying gasification project program, is
requested by the taxpayer that received
the credit allocation (or a successor in
interest that has timely entered into an
Agreement regarding the Project with the
Service), and involves moving the Project
site to improve the potential to capture
and sequester CO2 emissions (if applicable), reduce costs of transporting feedstock, and serve a broader customer base.
The Service will not agree to a project site
change if the dollar amount of tax credits
allocated to the taxpayer under § 48B
would increase as a result of the site
change or if the Project would not have
been originally certified had such modification been included in the taxpayer’s application;
(d) The Project will have a total synthesis gas capacity (as defined in section
3.03 of Notice 2014 – 81) of at least [insert
number] total MMBtu per hour of synthesis gas. The synthesis gas is composed
primarily of carbon monoxide and hydrogen for direct use or subsequent chemical
or physical conversion; and
(e) The fuels identified in § 48B(c)(2)
will at all times cumulatively comprise
at least 90 percent of the total fuel input
(as defined in section 3.04 of Notice
2014 – 81 and including fuels identified
in § 48B(c)(2) and any other fuel input)
required by the Project for normal plant
operations (as defined in section 3.04(2)
of Notice 2014 – 81) for the production
of chemical feedstocks, liquid transportation fuels, or co-production of electricity.
3. On [insert date of acceptance letter
issued under section 4.02(9) of Notice
2014 – 81], the Service accepted Taxpayer’s application for § 48B certification for
the Project and allocated qualifying gas-

December 29, 2014

ification project credit under § 48B Phase
III in the amount of $[insert number] to
the Project.
4. Taxpayer understands that if the
Project is not placed in service by Taxpayer within 7 years of [insert the date in
WHEREAS clause 3] as determined under
section 3.05 of Notice 2014 – 81, the
§ 48B Phase III credit in the amount allocated to the Project as specified in
WHEREAS clause 3 is fully forfeited.
Taxpayer must provide evidence to the
Service that the Project has been timely
placed in service.
5. Taxpayer understands that if the
plans for the Project change in any significant respect from the plans set forth in the
application for DOE certification (as defined in section 5.02 of Notice 2014 – 81)
and the application for § 48B certification
(as defined in section 5.03 of Notice
2014 – 81), other than a project site change
agreed to by the Service as described in
WHEREAS clause 2(c), the acceptance of
Taxpayer’s application for § 48B certification on the date specified in WHEREAS
clause 3 is void and the § 48B Phase III
credit in the amount allocated to the Project as specified in WHEREAS clause 3 is
fully forfeited.
6. Taxpayer understands that if the
Project fails to satisfy any of the requirements in § 48B for a qualifying gasification project—
(a) at the time the Project is placed in
service, the § 48B Phase III credit allocated to the Project as specified in
WHEREAS clause 3 is fully forfeited;
and
(b) after the Project is placed in service
(and after satisfying all such requirements
at the time the Project is placed in service), the Project ceases to be investment
credit property and the recapture rules of
§ 50(a) apply.
7. Taxpayer understands that, if the
Project fails to use gasification technology
as defined in § 48B(c)(2) or is not carried
out by an eligible entity (as defined in
section 3.02 of Notice 2014 – 81), the
§ 48B Phase III credit in the amount of
allocated to the Project as specified in
WHEREAS clause 3 is fully forfeited.
8. Taxpayer understands that if, at any
time, the fuels identified in § 48B(c)(2)
with respect to gasification technology do
not cumulatively comprise at least 90 per-

1008

cent of the total fuel input (as defined in
section 3.04 of Notice 2014 – 81 and including fuels identified in § 48B(c)(2)
and any other fuel input) required by the
Project for normal plant operations (as
defined in section 3.04(2) of Notice
2014 – 81) for the production of chemical feedstocks, liquid transportation fuels, or co-production of electricity, the
Project ceases to be investment credit
property and the recapture rules of
§ 50(a) apply.
9. Taxpayer understands that it cannot
claim the qualifying advanced coal project
credit under § 48A for any qualified investment for which the qualifying gasification project credit is allowed under
§ 48B.
10. Taxpayer understands that if Taxpayer elects to claim the qualifying gasification project credit on the qualified
expenditures paid or incurred by Taxpayer during the taxable year(s) during
which the Project is under construction
and the Project ceases to be a qualifying
gasification project (whether before, at
the time, or after the Project is placed in
service), rules similar to the recapture
rules in § 50(a)(2)(A) through (D)
apply.
11. This Agreement applies only to
Taxpayer. Taxpayer must notify the Service within 90 days of the acquisition of
the Project by any other person (a successor in interest). A successor in interest that
plans to claim the § 48B credit allocated
to the Project must request permission to
execute a new Agreement with the Service. If the request is granted, the new
Agreement must be executed no later than
the due date (including extensions) of the
successor in interest’s Federal income tax
return for the taxable year in which the
transfer occurs. If the interest is acquired
at or before the time the Project is placed
in service and the successor in interest
fails to execute a new Agreement, the
§ 48B Phase III credit in the amount allocated to the Project as specified in
WHEREAS clause 3 is fully forfeited. If
the interest is acquired after the time the
Project is placed in service and the successor in interest fails to execute a new
Agreement, the Project ceases to be investment credit property and the recapture
rules of § 50(a) apply.

Bulletin No. 2014 –53

NOW IT IS HEREBY
DETERMINED AND AGREED FOR
FEDERAL INCOME TAX
PURPOSES THAT:
1. The total amount of the § 48B Phase
III credit that Taxpayer will claim for the
Project under this Agreement on account of the acceptance of Taxpayer’s
application for § 48B certification cannot
exceed the amount specified in WHEREAS
clause 3;
2. This Agreement does not express
whether the Taxpayer has met any of the

requirements to receive tax credits under
§ 48B; and
3. This Agreement is limited and applies only to Taxpayer. A successor in
interest that plans to claim § 48B credit
allocated to the Project must request permission to execute a new Agreement with
the Service.
THIS AGREEMENT IS FINAL AND
CONCLUSIVE EXCEPT:

2. It is subject to the Internal Revenue
Code sections that expressly provide that
effect be given to their provisions notwithstanding any law or rule of law; and
3. If it relates to a tax period ending
after the date of this Agreement, it is subject to any law enacted after such date,
which applies to the tax period.
By signing, the parties certify that they
have read and agreed to the terms of this
Agreement.

1. The matter it relates to may be reopened in the event of fraud, malfeasance,
or misrepresentation of a material fact;

Taxpayer: [insert name and identifying number]
By: __________________________________ Date Signed: ____________
[insert name]
Title: [insert title]
[insert taxpayer’s name]
Commissioner of Internal Revenue
By: _________________________________ Date Signed: ____________
Kathy J. Robbins
Title: Industry Director, Natural Resources & Construction

APPENDIX B
APPLICATION FOR DOE
CERTIFICATION
REQUEST FOR SUPPLEMENTAL
APPLICATION INFORMATION
FOR DOE
The Internal Revenue Service (“Service”) and the Department of Energy
(“DOE”) seek to certify applications
that demonstrate a high likelihood of
being successfully implemented by the applicants. To qualify, projects must be technically and economically feasible and use
the appropriate gasification technology.
This request for submission of supplemental application information:
• Describes the information to be provided by the applicant seeking a DOE
certification of feasibility, and
• Lists the evaluation criteria and Program Policy Factors that are to be used
by DOE in the evaluation of applications.
If, after review by DOE, a project is
determined to be feasible, DOE will

Bulletin No. 2014 –53

provide a DOE certification of feasibility to the Service. The Service will
then accept or reject the taxpayer’s application for certification of the tax
credits.
In conducting this evaluation, DOE
may utilize assistance and advice from
qualified personnel from other Federal
agencies and/or non-conflicted contractors. DOE will obtain assurances in advance from all evaluators that application
information shall be kept confidential and
used only for evaluation purposes. DOE
reserves the right to request clarifications
and/or supplemental information from
some or all applicants through written
submissions and/or oral presentations, but
is not required to do so.
Notice is given that DOE may determine whether or not to provide a certification to the Service at any time after the
application has been received, without
further exchanges or discussions. Therefore, all applicants are advised to submit
their most complete and responsive application.
Applications will not be returned.

1009

INFORMATION TO BE
SUBMITTED IN AN APPLICATION
FOR DOE CERTIFICATION
A. General
This request, together with the information in relevant sections of Notice
2014 – 81 includes all the information
needed to complete an application for
DOE certification. All applications shall
be prepared in accordance with this request in order to provide a standard basis
for evaluation and to ensure that each application will be uniform as to format and
sequence.
Each application should clearly demonstrate the applicant’s capability, knowledge, and experience regarding the requirements described herein.
Applicants should fully address the requirements of Notice 2014 – 81 and this
request and not rely on the presumed
background knowledge of reviewers.
DOE may reject an application that does
not follow the instructions regarding the
organization and content of the application when the nature of the deviation

December 29, 2014

and/or omission precludes meaningful review of the application.
B. Unnecessarily Elaborate
Applications
Unnecessarily elaborate brochures or
other presentations beyond those sufficient to present a complete and effective
application are not desired. Elaborate art
work, graphics and pictures are neither
required nor encouraged.
C. Application Submission for DOE
Certification
The application submission to DOE
must include the information and documentation required by relevant sections of
Notice 2009 –23.
An application to DOE will not be considered in the § 48B Phase III allocation
round unless it is postmarked by March 2,
2015. One electronic version on a USB
flash drive or a CD of the application must
be submitted to:
Gina Mick
National Energy Technology
Laboratory
3610 Collins Ferry Road
Morgantown, WV 26507
Note that under section 5.03(4) of Notice 2014 – 81, one electronic version of
the Application for DOE certification
must be sent to the Service as part of the
application for § 48B certification. The
application for § 48B certification will not
be considered in the § 48B Phase III allocation round under this notice unless it is
submitted to the Service by March 2,
2015.
THE INFORMATION REQUIRED
BY THIS REQUEST MUST BE
SUBMITTED USING THE FORMAT
AND THE HEADINGS OF THE
PROJECT INFORMATION
MEMORANDUM AS DESCRIBED
BELOW.
To aid in evaluation, applications shall
be clearly and concisely written and logically assembled. All pages of each part
shall be appropriately numbered and identified with the name of the applicant and
the date.
The application, including the Project
Information Memorandum, MUST be for-

December 29, 2014

matted in one of the following software
applications:
• Microsoft Wordtm 2010 or later edition
• Microsoft Exceltm 2010 or later edition
• Adobe Acrobattm PDF 7.0 or later edition
Financial models should be submitted
using the Exceltm spreadsheet and must
include working calculation formulas and
clearly identified assumptions.
The applicant is responsible for the integrity and structure of the electronic files.
DOE will not be responsible for reformatting, restructuring or converting any files
submitted in response to this request.
The Project Information Memorandum, excluding Appendices, shall not exceed seventy-five (75) pages. Pages in excess of the page limitation will not be
considered for evaluation. All text shall be
typed, single spaced, using 12 point font,
1 inch margins, and unreduced 8-1/2-inch
by 11-inch pages. Illustrations and charts
shall be legible with all text in legible
font. Pages shall be sequentially numbered. Except as otherwise noted herein
the page guidelines previously set forth
constitute a limitation on the total amount
of material that may be submitted for
evaluation. No material may be incorporated in any application by reference as a
means to circumvent the page limitation.
D. Project Information Memorandum
1. Summary and Introduction
• Description of the Project
• Financing and Ownership Structure
X Include a list of all IRC section
48B tax credit allocations
• Description of the main parties to the
project, including background, ownership and related experience
• Current Project Status and Schedule
to Beginning of Construction
2. Technology and Technical
Information
Provide a description of the proposed
technology, including sufficient supporting
information (such as vendor guarantees,
process flow diagrams, equipment descriptions, information on each major process
unit and the total plant, compositions of
major streams, and the technical plan for

1010

achieving the goals proposed for the project)
as would be needed to allow DOE to confirm
that the technical requirements of § 48B are
met. Specifically, the applicant should:
• Provide evidence sufficient to demonstrate that the proposed technology
will employ gasification technology as
defined in § 48B(c)(2).
• Present information sufficient to justify the total amount of synthesis gas
(as defined in § 48B(c)(2)) to be produced by the project (synthesis gas
capacity).
• Provide the total MMBtu/hr of the
synthesis gas (HHV) at the gasifier
outlet.
• Provide evidence sufficient to ensure
that fuels identified in § 48B(c)(2) will
comprise 90 percent of the total fuel
input (fuels identified in § 48B(c)(2)
and any other fuel input) for the project. Provide the total quantities of CO,
H2, CH4, CO2, and water in the synthesis gas.
• Identify the domestic industry for
which the proposed project is intended
to be used.
• Identify the specific products and
quantities produced by the proposed
project, providing sufficient evidence
to support claims.
• Provide evidence that indicates, for
projects using nonrenewable fuels, the
gasification technology design reflects
reasonable consideration for, and if applicable, is capable of, accommodating
equipment necessary to capture CO2
for later use or sequestration. Include
the project status and relevant information from ongoing engineering activities. Also include in an appendix
any engineering report or reports used
by the applicant to develop the project
and to estimate costs and operating
performance.
• If applicable, provide evidence sufficient to demonstrate that the project
includes equipment which separates
and permanently sequesters CO2 emissions and provide the percentage of the
project’s total CO2 emissions that are
separated and permanently sequestered. The CO2 separation and sequestration percentage shall be calculated based on the amount of CO2
sent for permanent sequestration and
the total CO2 which would otherwise

Bulletin No. 2014 –53

be released into the atmosphere as
industrial emission of greenhouse
gas. Also provide CO2 separation,
capture, sequestration, and emission
quantities on a metric tons per hour
basis and on a metric tons per year
basis, both under normal plant operating conditions.
3. Applicant’s Capability to
Accomplish the Technical Objectives
Provide a narrative supporting the applicant’s capability to accomplish the
technical objectives of the proposed
project, including supporting documentation demonstrating that the applicant
has assembled a team that is formally
committed to participate in the proposed
project.
Provide information to support that the
applicant has assembled a team with the
skills and resources needed to implement
the project as proposed.
Provide signed agreements or letters
from team members demonstrating that
the proposed team members are fully
committed to the project.
Provide information, including examples of prior similar projects completed
by applicant, engineering-procurementconstruction (“EPC”) contractor, and
suppliers of major subsystems or equipment, which support the capabilities of
the applicant and its team members to
design, construct, permit, and operate
the facility. The applicant should demonstrate that the team members have a
corporate history of successful completion of similar projects.
Provide information to support that key
personnel of the applicant and its team
members have knowledge, experience,
and adequate degree of involvement to
successfully implement the project.
Include the project status and relevant
information from ongoing engineering activities. Also include in an appendix any
engineering report or reports used by the
applicant to develop the project and to
estimate costs and operating performance.
Include copies of any signed agreements
to support project status claims regarding
preliminary design studies, front-end engineering design (“FEED”) and EPC-type
agreements.

Bulletin No. 2014 –53

4. Site Control and Ownership
Provide evidence that demonstrates the
overall feasibility of implementing the
project at the proposed site.
Provide evidence that the applicant
owns or controls a site in the United States
of sufficient size to allow the proposed
project to be constructed and operated on
a long-term basis. Documentation such as
a deed demonstrating the applicant owns
the project site, a signed option to purchase the site from the site owner, or a
letter of intent signed by the site owner
and stating the site owner’s intent to sell
the site to the applicant should be provided.
Describe the current infrastructure at
the site available to meet the needs of the
project.
Provide documentation supporting applicant’s conclusion that the proposed site
can fully meet all environmental, feedstock supply, water supply, transmission
interconnect and public policy requirements. Such documentation may include
signed agreements, letters of intent, or
term sheets relating to feedstock supply,
water supply, and product (e.g. CO2)
transportation etc., and regulatory approvals supporting the key claims.
Provide detailed plans, schedules and
status updates, particularly for sites with
pre-existing conditions that could impact
the proposed project. Pre-existing conditions may include, but are not limited to,
sites with mandated environmental remediation efforts; brown-field sites that will
require building demolition; or sites requiring substantial rerouting of existing
roads, railroads, transmission lines, or
pipelines prior to the start of the project.
Applicants must select one “proposed
site.” However, projects with key physical
or logistical elements that require close
integration with another system for the
project to succeed should provide information on all integrated systems regardless of where they are located. Example 1:
a gasification plant designed to operate
exclusively on coal from a to-be-opened
mine should provide supporting documentation for the new mine. Example 2: an
oxygen-blown gasification plant planning
to purchase oxygen from a third party who
will construct a plant exclusively for
this project should provide documenta-

1011

tion for the oxygen supplier. Example 3:
an industrial gasification plant planning
to sell CO2 for enhanced oil recovery
(“EOR”) should provide an agreement
for such a transaction indicating the annual CO2 purchase quantity, expected
project lifetime sales, CO2 capacity of
the site for EOR, and EOR site ownership.
5. Utilization of Project Output
Provide evidence that demonstrates
that a majority of the proposed project
output is reasonably expected to be acquired or utilized.
Provide a projection of the anticipated
costs of electricity and other marketable
by-products produced by the plant.
Provide documentation establishing
that a majority of the output of the plant is
reasonably expected to be acquired or utilized. Such documentation should be
signed by authorizing officials of both the
buyer and seller, and may include: Sales
Agreements, Letters of Intent, Memoranda of Understanding, Option Agreements, and Power Purchase Agreements.
Describe any energy sales arrangements that exist or that may be contemplated (e.g., a Power Purchase Agreement
or Energy Sales Agreement) and summarize their key terms and conditions.
Include as an appendix any independent Energy Price Market Study that has
been done in connection with this project,
or if no independent market study has
been completed, provide a copy of the
applicant-prepared market study.
Identify and describe any firm arrangements to sell non-power output, such as
CO2, and provide any evidence of such
arrangements. If the project produces a
product in addition to power, include as an
appendix any related market study of
price and volume of sales expected for
that product.
6. Project Economics
Describe the project economics and
provide satisfactory evidence of economic
feasibility as demonstrated through the financial forecast and the underlying project assumptions. The project economic
and financial assumptions should be
clearly stated and explained.

December 29, 2014

Show calculation of the amount of tax
credit applied for based on allowable cost
and any existing IRC Section 48B tax
credit allocations.
7. Project Development and Financial
Plan
Provide the total project budget and
major plant costs (e.g., development, operating, capital, construction, and financing costs). Provide the estimated annual
budget for and source of project development costs from the time of the application until the beginning of construction,
including legal, engineering, financial, environmental, overhead, and other development costs. Describe the overall approach
to project development and financing sufficient to demonstrate project viability.
Provide a complete explanation of the
source and amount of project equity. Provide a complete explanation of the source
and amount of project debt. Provide the
audited financial statements for the most
recently ended three fiscal years and quarterly interim financial statements for the
current fiscal year for (a) the applicant, (b)
for any of the project parties providing
funding, and (c) for any third party funding source. If the applicant or another
party does not have audited financial
statements, the applicant or the party
should provide equivalent financial statements prepared by the applicant or the
party, in accordance with Generally Accepted Accounting Principles, and certified as to accuracy and completeness by
the Chief Financial Officer of the party
providing the statements.
For internally financed projects, provide evidence that the applicant has sufficient assets to fund the project with its
own resources. Identify any internal approvals required to commit such assets.
Include in an appendix copies of any
board resolution or other approval authorizing the applicant to commit funds and
proceed with the project.
For projects financed through debt instruments either unsecured or secured by
assets other than the project, provide evidence that the applicant has sufficient
creditworthiness to obtain such financing
along with a discussion of the status of
such instruments. Identify any internal approvals required to commit the applicant

December 29, 2014

to pursue such financing. Include in an
appendix, copies of any board resolution
or other approval authorizing the applicant to commit to such financing.
For projects financed through investor
equity contributions, describe the source
and status of each contribution. Discuss
each investor’s financial capability to
meet its commitments. Include in an appendix copies of any executed investment
agreements.
If financing through a public offering
or private placement of either debt or equity is planned for the project, provide the
expected debt rating for the issue and an
explanation of applicant’s justification for
the rating. Describe the status of any discussions with prospective investment
bankers or other financial advisors.
Include as an appendix copies of any
existing funding commitments or expressions of interest from funding sources for
the project.
For projects employing nonrecourse or
limited recourse debt financing, provide a
complete discussion of the approach to,
and status of, such financing. In an appendix: (1) provide an Excel based financial
model of the project, with formulas, so
that review of the model calculations and
assumptions may be facilitated; and (2)
provide pro-forma project financial, economic, capital cost, and operating assumptions, including detail of all project
capital costs, development costs, interest
during construction, transmission interconnection costs, other operating expenses, and all other costs and expenses.
8. Project Contract Structure
Describe the current status of each of
the agreements set forth below. Include as
an appendix copies of the contracts or
summaries of the key provisions of each
of the following agreements:
• Power Purchase Agreement (if not
fully explained in section 5 above).
• Raw Material Input: describe the
source and price of raw material inputs
for the project. Include as an appendix
any studies of price and amount of raw
materials that have been prepared. Include a summary of any supply contracts and a signed copy of the contracts.

1012

• Transportation: explain the arrangements for transporting project inputs
and outputs, including costs.
• Operations & Maintenance Agreement: include a summary of the terms
and conditions of the contract and a
copy of the contract.
• Shareholders Agreement: summarize
key terms and include the agreement
as an appendix.
• Engineering, Procurement and Construction Agreement: describe the key
terms of the existing or expected EPC
contract arrangement, including firm
price, liquidated damages, hold-backs,
performance guarantees, etc.
• Water Supply Agreement: confirm
the amount, source, and cost of water
supply.
• Transmission Interconnection Agreement: explain the requirements to connect to the system and the current status of negotiations in this respect.
• If CO2 is separated by the project and
is to be sold to a third party for sequestration, provide a Sales Agreement and
provide specifics, such as CO2 sales
(metric tons per year), expected project lifetime sales (metric tons), potential CO2 capacity of the site for sequestration (metric tons), technology
and site suitability for sequestration,
and sequestration site ownership and
operation.
9. Permits Including Environmental
Authorizations
Provide a complete list of all Federal,
state, and local permits, including environmental authorizations or reviews, necessary to commence construction of the
project.
Explain what actions have been taken
to date to satisfy the required authorizations and reviews, and the status of each.
Provide a description of the applicant’s
plan to obtain and complete all necessary
permits, and environmental authorizations
and reviews.
10. Project Schedule
Provide an overall project schedule
which includes technical, business, financial, permitting and other factors to sub-

Bulletin No. 2014 –53

stantiate that the project will meet the 7
year placed-in-service requirement.
The project schedule should be comprehensive and provide sufficient detail to
demonstrate how applicant will meet the
placed-in-service requirement. The schedule should demonstrate that the applicant
understands the required tasks, and has
allowed realistic times for accomplishing
the technical and financial tasks. The
schedule should include the milestone accomplishments needed to obtain the financing for the project.
11. Appendices
• Copy of internal or external engineering reports.
• Copy of site plan, together with evidence that applicant owns or controls a
site. Examples of evidence would include a deed, or an executed contract
to purchase or lease the site.
• Information supporting applicant’s
conclusion that the site is fully acceptable as the project site with respect to
environment, raw material supply, water supply, transmission interconnect,
and public policy reasons.
• Power Purchase or Energy Sales
Agreement
• Energy Market Study.
• Financial Model of project.
• Financial statements for the applicant
and other project funding sources for
the most recently ended three fiscal
years, and quarterly interim financial
statements for the current fiscal year.
• Expressions of interest or commitment
letters from funding sources.
• Copies of executed project contracts.
If no contract currently exists, provide
a summary of the expected terms and
conditions.
• List of all Federal, state, and local permits, including environmental authorizations or reviews, necessary to commence construction.

ect. Without that decision, it is difficult to
provide the necessary specific design information needed for DOE to evaluate the
project feasibility with respect to performance, emissions, outputs of major
streams as well as capital and operating
costs.
Project Economics

Technology and Technical
Information
It is important that the applicant select
a specific gasification system for the proj-

Bulletin No. 2014 –53

EVALUATION CRITERIA
A. Criteria of § 48B

Applicants should demonstrate the
project’s economic feasibility and financial viability by providing a clear statement and explanation of the economic and
financial assumptions made by the applicant, and a financial forecast for the project. The financial forecast should flow
logically from the applicant’s assumptions
and be consistent with them. Applicants
should include assumptions regarding financial and economic issues that may not
be included in the project costs but have a
direct impact on the project. The examples
given in the “Site Control and Ownership”
section are relevant here and their impact
on the project economics should be discussed here.
Project Development and Financial
Plan
The information provided by the applicant in this section should demonstrate
that the applicant’s financial plan for developing the project is feasible and that
the applicant will have access to necessary
financing. The applicant should explain
the source and timing for obtaining all
financing, including the project development costs. It is important that the applicant explain and provide evidence that it
has the capacity to fund the preconstruction project development costs,
together with a budget for and description
of those costs. Note that financial information is required for the applicant and
for any other funding source.
Project Contract Structure

E. Supplemental Technical and
Financial Guidance for Project
Information Memorandum

relative to price, terms, and conditions are
consistent with current market conditions.
Evidence of final agreements, agreements
in principle, or summaries of terms and
conditions between the applicant and contract counterparties should be provided, if
available.

This section requires that the applicant
demonstrate an understanding of the commercial contracting process and show
progress in establishing the framework of
contracts and agreements that a project
typically requires. Applicants should
show that their intended contract structure
is reasonable and that their assumptions

1013

Gasification projects will be evaluated
on whether they meet all the requirements
of § 48B including:
Technical: whether the applicant has
demonstrated the capability to accomplish
the technical objectives.
Site: whether the site requirement for
ownership or control has been met, and
that the site is suitable for the proposed
project.
Economic: whether the project has
demonstrated economic feasibility, taking
into consideration the submitted financial
and project development, structural information, and financial plan.
Schedule: the applicant’s ability to
meet the 7 year placed-in-service requirement.
B. Program Policy Factors to Be Used
by DOE in the Evaluation of
Applications
Section 48B identifies minimum requirements for consideration for the qualifying gasification project credit, including the project’s technical feasibility, cost,
and applicant’s ability. In the event that
there are more qualified (certifiable) applications than there are available amount
of tax credits, DOE will apply additional
factors to rank eligible projects based on
their ability to advance gasification technology beyond its current state.
If there are more certified applications
than available amount of § 48B Phase III
credits, DOE will rank the certified projects based on evaluation of the following
Program Policy Factors. In ranking certified projects, highest priority will be given
to the Primary Ranking Factor. Secondary
and Tertiary Ranking Factors will be
taken into account to rank projects that are
not clearly differentiated on the basis of
the Primary Ranking Factor, with higher
priority given to the Secondary Ranking
Factors than to Tertiary Ranking Factors.

December 29, 2014

Primary Ranking Factor:
• Capacity to separate and sequester
CO2 emissions. Among the certified
projects, highest rankings will be
given to projects with the greatest separation and sequestration percentage
of total CO2emissions.
Secondary Ranking Factor:
• Research partnership with an eligible
educational institution as defined in
§ 48B(d)(4)(B).
Tertiary Ranking Factors:
• Presentation of other environmental,
economic, or performance benefits.
• Higher plant efficiency.
• Geographic distribution of potential
markets.
• The ratio of total synthesis gas capacity (as defined in section 3.03 of Notice 2014 – 81) to requested tax credit.
• Diversity of technology approaches
and methods.
[26 CFR 601.106]: [Appeals Functions]
(Also: §§ 601.202, 601.203; and Part I, § 7123(b))

Rev. Proc. 2014 – 63
SECTION 1. PURPOSE
This revenue procedure updates Revenue Procedure 2009 – 44, 2009 –2 C.B.
462, incorporating provisions of Announcements 2008 –111 and 2011– 6 relating to mediation, to expand and clarify
the types of examination and collection
cases and issues in the Appeals administrative process that are eligible for mediation pursuant to section 7123(b)(1) of the
Internal Revenue Code (Code).1 Generally, mediation is available for examination cases and certain collection cases in
which a limited number of legal and factual issues remain unresolved following
settlement discussions in Appeals.
SECTION 2. BACKGROUND
Section 7123(b)(1) of the Code, as enacted by section 3465 of the Internal Revenue Service Restructuring and Reform
Act of 1998, Pub. L. No. 105–206, 112
1

Stat. 685, provides the statutory authority
for the Appeals mediation program. Section 7123(b)(1)(A) provides that mediation will be available on any issue unresolved at the conclusion of Appeals
procedures. Section 7123(b)(1)(B) provides that mediation will be available on
any issue unresolved at the conclusion of
unsuccessful attempts to enter into a closing agreement under section 7121 or a
compromise under section 7122.
In announcements issued in 1995 and
1997, the IRS established procedures for
taxpayers to request mediation in Coordination Examination Program cases assigned to Appeals Team Chiefs. See Announcement 95– 86, 1995– 44 I.R.B. 27,
and Announcement 97–1, 1997–2 I.R.B.
62. In 1998, the IRS announced that it
would begin a two-year pilot of an expanded mediation program that would encompass factual issues arising from examination, involving adjustments of $1
million or more. See Announcement 98 –
99, 1998 –2 C.B. 652. In 2001, that pilot
program was extended for an additional
year. See Announcement 2001–9, 2001–1
C.B. 357. On July 1, 2002, the IRS published Rev. Proc. 2002– 44, 2002–2 C.B.
10, which superseded Announcement
98 –99 and Announcement 2001–9, formally established the Appeals mediation
program, and further expanded the types
of cases for which mediation would be
available, including cases where there was
an unsuccessful attempt to enter into a
closing agreement.
Under these programs, mediation was
not available for any collection case or
issue. In Announcement 2008 –111,
2008 – 48 I.R.B. 1224, published December 1, 2008, Appeals established a twoyear pilot program to extend mediation
and arbitration to certain collection cases.
Under the pilot program, certain offer-incompromise (OIC) and Trust Fund Recovery Penalty (TFRP) cases in Appeals
offices in select cities were eligible for
mediation.
Rev. Proc. 2009 – 44 updated and superseded Rev. Proc. 2002– 44 to again expand and clarify the types of cases that
may be mediated in Appeals. In addition,
Rev. Proc. 2009 – 44 provided that mediation may be available for OIC and TFRP

cases described in Announcement 2008 –
111. Announcement 2011– 6, 2011– 4
I.R.B. 433, published January 24, 2011,
extended, without change, the mediation
pilot for collection cases, through December 31, 2012.
This revenue procedure consolidates
the procedures for mediation of examination cases and issues and collection cases
and issues into a single revenue procedure. This revenue procedure also makes
other changes to Rev. Proc. 2009 – 44, set
forth in Section 3. Accordingly, this revenue procedure supersedes Rev. Proc.
2009 – 44 and Announcements 2008 –111
and 2011– 6.
SECTION 3. SIGNIFICANT
CHANGES TO REV. PROC. 2009 –
44 AND ANNOUNCEMENTS 2008 –
111 AND 2011– 6
Significant changes to Rev. Proc.
2009 – 44 and Announcements 2008 –111
and 2011– 6 in this revenue procedure include:
.01 Section 4.04(7) clarifies that
“whipsaw” issues include issues on a joint
return where both spouses do not agree to
participate in the same mediation proceeding or where a spouse is claiming innocent
spouse treatment under section 6015.
.02 The mediation process for OIC and
TFRP cases is no longer limited to taxpayers in selected cities.
.03 Section 5.01 incorporates from Announcement 2008 –11 and Announcement
2011– 6 the scope of OIC cases and issues
for which mediation is available.
.04 Section 5.02 incorporates from Announcement 2008 –11 and Announcement
2011– 6 the scope of OIC cases and issues
for which mediation is not available.
.05 Section 5.02(6) reflects that mediation is not available at this time for OIC
cases that are worked solely at Appeals
Campuses/Service Center sites.
.06 Section 6.01 incorporates from Announcement 2008 –11 and Announcement
2011– 6 the scope of TFRP cases and issues where mediation is available.
.07 Section 6.02 clarifies a circumstance in which mediation is not available
in TFRP cases. Under this provision, mediation is not available to resolve issues
concerning whether a TFRP is collectible.

For purposes of this revenue procedure, the term “mediation” refers only to “non-binding mediation” as set forth in section 7123(b)(1).

December 29, 2014

1014

Bulletin No. 2014 –53

Announcement 2008 –11 and Announcement 2011– 6 did not expressly exclude
this issue from the list of TFRP issues
where mediation would be available.
.08 Section 9.01 clarifies that a representative from the Appeals Office of Tax
Policy and Procedure may participate in
the negotiations to select an Appeals mediator.
SECTION 4. SCOPE OF
MEDIATION
.01 In general. Mediation may be used
to resolve issues in cases that qualify under this revenue procedure while they are
under consideration by Appeals. This procedure may be used only after Appeals
settlement discussions are unsuccessful
and, generally, when all other issues are
resolved but for the issue(s) for which
mediation is being requested.
.02 Authority. The mediation procedure does not create any special authority
for settlement by Appeals. During the mediation process, Appeals is still subject to
the procedures that would be applicable if
the issue were being considered via the
standard Appeals process, including procedures in the Internal Revenue Manual
and existing published guidance. The mediator does not have settlement authority
and cannot render a decision regarding
any issue in dispute.
.03 Applicability. Mediation is available for:
(1) Legal issues;
(2) Factual issues;
(3) A Compliance Coordinated Issue
(CCI) or an Appeals Coordinated Issue
(ACI). (CCI and ACI issues are listed
online at www.irs.gov/appeals). However,
a CCI or ACI issue will not be eligible for
mediation when the taxpayer has declined
the opportunity to discuss the CCI or ACI
issue with the Appeals CCI or ACI coordinator during the course of regular Appeals settlement discussions;
(4) An early referral issue when an
agreement is not reached, provided the
early referral issue meets the requirements
for mediation. For more information on
early referrals, see section 2.16 of Rev.
Proc. 99 –28, 1999 –2 C.B. 109, or the
corresponding provision of any successor
guidance;
(5) Issues for which a request for competent authority assistance has not yet

Bulletin No. 2014 –53

been filed. Taxpayers are cautioned that if
they enter into a settlement with Appeals
(including an Appeals settlement through
the mediation process) and then request
competent authority assistance, the competent authority will endeavor only to obtain a correlative adjustment with the
treaty country and cannot take any actions
that would otherwise change the settlement. See section 7.05 of Rev. Proc.
2006 –54, 2006 –2 C.B. 1035, or the corresponding provision of any successor
guidance. If a taxpayer enters into the
Appeals mediation program, the taxpayer
may not request competent authority assistance until the mediation process is
complete, unless the taxpayer demonstrates that a request for competent authority assistance is necessary to keep
open a period of limitations in the treaty
country. If so, competent authority assistance may be requested while mediation is
pending. Where the requirements of this
section have been satisfied and competent
authority has been requested, and the taxpayer must notify the U.S. competent authority that the case is in mediation in
Appeals, the taxpayer must notify the mediator that competent authority assistance
has been requested and that the provisions
of this section have been satisfied. The
U.S. competent authority will suspend action on the case until mediation is completed;
(6) Unsuccessful attempts to enter into
a closing agreement under section 7121;
(7) OIC issues, as provided in Section
5 of this revenue procedure; and
(8) TFRP issues, as provided in Section
6 of this revenue procedure.
.04 Inapplicability. Mediation is not
available for:
(1) Cases in which mediation is not
appropriate under either 5 U.S.C. § 572 or
5 U.S.C. § 575, which provide the general
authority and guidelines for use of alternative dispute resolution in the administrative process;
(2) Issues designated for litigation;
(3) Issues docketed in any court (for
the Chief Counsel mediation program involving issues in docketed cases, see
Chief Counsel Directives Manual
(CCDM) 35.5.5.4);
(4) Collection cases, except for certain
OIC and TFRP cases as detailed in this
revenue procedure;

1015

(5) Issues for which mediation would
not be consistent with sound tax administration, such as, but not limited to, issues
governed by closing agreements, res judicata, or controlling Supreme Court precedent;
(6) Frivolous issues, such as, but not
limited to, those identified in Rev. Proc.
2012–2, 2012–1 I.R.B. 92, or any subsequent revenue procedure;
(7) “Whipsaw” issues, or issues for
which resolution with respect to one party
might result in inconsistent treatment in
the absence of participation of another
party, such as, but not limited to, issues on
a joint return where both spouses do not
agree to participate in the same mediation
proceeding or where one spouse is claiming innocent spouse treatment under section 6015;
(8) Cases in which the taxpayer did not
act in good faith during settlement negotiations, such as, but not limited to, cases
in which the taxpayer failed to timely respond to document requests or offers to
settle, or failed to address arguments and
precedents raised by Appeals;
(9) Cases that were previously mediated through a different alternative dispute
resolution program within Appeals, such
as Fast Track Settlement or Fast Track
Mediation; and
(10) Issues that have been otherwise
identified in subsequent guidance issued
by the IRS as excluded from the mediation program.
SECTION 5. OFFER-INCOMPROMISE CASES
.01 In general. Provided all facts are
known by both parties, mediation in OIC
cases is available for the following issues:
(1) The value of assets, including those
held by a third party;
(2) The value of dissipated assets and
what amount should be included in the
overall determination of reasonable collection potential;
(3) A taxpayer’s proportionate interest
in jointly held assets;
(4) Projections of future income based
on calculations that do not involve current
income;
(5) The calculations of a taxpayer’s
future ability to pay when living expenses
are shared with a non-liable person;

December 29, 2014

(6) Whether the taxpayer meets the criteria for deviating from national and/or
local expense standards described in Internal Revenue Manual 5.15.1 and as set
forth at http://www.irs.gov/Businesses/
Small-Businesses-&-Self-Employed/
National-Standards-Food-Clothing-andOther-Items;
(7) Other factual determinations, such
as whether a taxpayer’s contributions into
a retirement savings account are discretionary or mandatory as a condition of
employment.
.02 Exclusions. Mediation is not available for OIC cases in which:
(1) The taxpayer has the ability to pay
in full based on the unadjusted financial
information submitted by the taxpayer,
except when economic hardship exists;
(2) The taxpayer declines to amend or
increase the offer without stating any specific disagreement with the valuations,
figures, or methodology used by Appeals
in determining reasonable collection potential;
(3) The disputed issue is explicitly addressed by IRS guidance or authority, including but not limited to regulations,
published guidance, the Internal Revenue
Manual, forms or instructions. For example, the instructions for Form 656 explicitly state that the IRS will not consider
expenses for tuition for private schools,
college expenses, charitable contributions,
and other unsecured debt payments as part
of the OIC expense calculation. Therefore, mediation is not available with respect to whether any of these expenses
will be considered in evaluating the taxpayer’s offer;
(4) An OIC is submitted as an alternative to collection in a Collection Due Process or equivalent hearing case;
(5) The issue of liability was previously determined by Appeals;
(6) The case was worked solely at an
Appeals Campus/Service Center site; or
(7) Delegation Order 5–1 requires a
level of approval higher than that of the
Appeals Team Manager, such as certain
Effective Tax Administration offers or
those in which a determination is made by
Appeals that acceptance is not in the best
interest of the government (see Policy
Statement P–5–100 and IRM 5.8.7, Return, Terminate, Withdraw, and Reject
Processing).

December 29, 2014

SECTION 6. TRUST FUND
RECOVERY PENALTY CASES
.01 In general. Mediation is available
in TFRP cases for the following issues:
(1) Whether the person was required to
collect, truthfully account for, and pay
over income, employment, or excise taxes;
(2) Whether a responsible person willfully failed to collect or truthfully account
for and pay over income, employment, or
excise taxes, or willfully attempted in any
manner to evade or defeat the payment of
such tax;
(3) Whether a taxpayer sufficiently
designated a payment to the trust fund
portion of the unpaid tax; and
(4) Whether the taxpayer provided sufficient corporate payroll tax records to establish that a corporate tax deposit was in
the amount required by Treas. Reg.
§ 31.6302–1(c) and, therefore, was considered a designated payment to be applied to both the trust fund and non-trust
fund portions of the employment taxes
associated with that specific payroll. See
IRM 5.7.4.3, Investigation and Recommendation of the Trust Fund Recovery
Penalty, Calculating the TFRP.
.02 Exclusions. Mediation is not available to resolve issues concerning whether
the penalty is collectible (see IRM 5.7.5,
Trust Fund Compliance, Collectibility
Determination).
SECTION 7. APPLICATION
PROCESS
.01 Mediation is optional. A taxpayer
and Appeals may request mediation after
consultation with each other. Mediation
will not occur unless both parties agree to
participate in the process.
.02 Filing requirements.
(1) Where to file. To request mediation,
the taxpayer should send a written request
to the appropriate Appeals Team Manager. The taxpayer should also send copies of the written request to the appropriate Appeals Area Director. (See Exhibit 1
of this revenue procedure for a listing of
the addresses for each Appeals Area Director.)
(2) Required information. The mediation request should include:
(a) The taxpayer’s name, taxpayer
identification number, and address (and

1016

the name, title, address, and telephone
number of a different contact person, if
applicable);
(b) The name of the Team Case
Leader, Appeals Officer, or Settlement
Officer;
(c) The taxable period(s) involved;
(d) A description of the issue for which
mediation is being requested, including
the dollar amount of the adjustment or, if
applicable, the OIC in dispute; and
(e) A representation that the issue is not
an excluded issue listed in Section 4, Section 5, or Section 6 above.
.03 Review of mediation request. The
Appeals Team Manager will confer with
the Appeals Office of Tax Policy and Procedure before deciding to approve or deny
a mediation request. Generally, the Appeals Team Manager will respond to the
taxpayer and the Team Case Leader or
Appeals Officer within two weeks after
the Appeals Team Manager receives the
request for mediation.
(1) Request approved. If Appeals approves the mediation request, the Appeals
Team Manager will inform the taxpayer
and the Team Case Leader, Appeals Officer, or Settlement Officer and will schedule a conference or conference call at a
mutually agreeable time that may include
a representative from the Appeals Office
of Tax Policy and Procedure to discuss the
mediation process.
(2) Request denied. If Appeals denies
the mediation request, the Appeals Team
Manager will promptly inform the taxpayer and the Team Case Leader, Appeals
Officer, or Settlement Officer. Although
no formal appeal procedure exists for the
denial of a mediation request, a taxpayer
may request a conference with the Appeals Team Manager to discuss the denial.
The denial of a mediation request is not
subject to judicial review.
SECTION 8. AGREEMENT TO
MEDIATE
.01 Written agreement. Upon approval
of the request to mediate, the taxpayer and
Appeals will enter into a written agreement to mediate. See Exhibit 2 of this
revenue procedure for a model agreement
to mediate. A representative from the Appeals Office of Tax Policy and Procedure
may participate in the negotiation. The
agreement to mediate should:

Bulletin No. 2014 –53

(a) Be as concise as possible;
(b) Specify the issue(s) that the parties
have agreed to mediate;
(c) Contain an initial list of witnesses,
attorneys, representatives, and observers
for each party;
(d) Identify the location and the proposed date of the mediation session; and
(e) Prohibit ex parte contacts between
the mediator and the parties.
The Appeals Team Manager, in consultation with the Team Case Leader or
Appeals Officer, will sign the agreement
to mediate on behalf of Appeals.
Generally, it is expected that the parties
will complete and execute the agreement
to mediate within three weeks after being
notified that Appeals has approved the
mediation request, and will proceed to
mediation within 60 days after signing the
written agreement to mediate. A taxpayer’s inability to adhere to these timeframes, without reasonable cause, may result in Appeals’ withdrawal from the
mediation process.
.02 Participants. The parties to the mediation process will be the taxpayer and
Appeals. Each party must have at least
one participant with decision-making authority attending the mediation session.
The written agreement to mediate will set
forth the procedures by which the parties
inform each other and the mediator of the
participants in the mediation, and will set
forth any limitation on the number, identity, or participation of such participants.
The parties are encouraged to include, in
addition to the required decision-makers,
those persons with information and expertise that will be useful to the decisionmakers and the mediator. To minimize the
possibility of a last minute disqualification
of the mediator, each party must notify the
mediator and the other party of the participants on the party’s mediation team no
later than two weeks before the mediation.
See Exhibit 3 of this revenue procedure
for a model participants list.
.03 Disclosure. To participate in mediation under this revenue procedure, the
taxpayer must consent under section
6103(c) to the disclosure by the IRS of the
taxpayer’s returns and return information
incident to the mediation to the mediator
and any participant or observer identified
in the initial list of participants and observers and to any subsequent participants

Bulletin No. 2014 –53

and observers identified in writing by the
parties. The taxpayer must execute a separate consent to disclose the taxpayer’s
return and return information. See Exhibit
4 of this revenue procedure for a model
consent. If the agreement to mediate and
consent are executed by a person pursuant
to a power of attorney executed by the
taxpayer, that power of attorney must
clearly express the taxpayer’s grant of authority to consent to disclose the taxpayer’s returns and return information by the
IRS to third parties, and a copy of that
power of attorney must be attached to the
agreement.
SECTION 9. MEDIATION PROCESS
.01 Selection of mediator and expenses. An Appeals employee trained as a
mediator will serve as the mediator under
this revenue procedure. Appeals will pay
all expenses associated with the use of an
Appeals mediator. A representative from
the Appeals Office of Tax Policy and Procedure may participate in the negotiations
to select an Appeals mediator. Pursuant to
IRM 8.26.5.4.4, the taxpayer and the Appeals Team Manager will select the Appeals mediator from a list of trained employees who, generally, will be located in
the same Appeals office or geographical
area as the taxpayer, but will not be a
member of the same team that was assigned to the case. Other criteria for selecting a mediator from Appeals may include previous mediation experience or
knowledge of industry practices.
Additionally, at the taxpayer’s expense, the taxpayer may elect to use a
co-mediator who is not employed by the
IRS. The taxpayer and the Appeals Team
Manager will select the non-IRS comediator from any local or national organization that provides a roster of neutrals.
A representative from the Appeals Office
of Tax Policy and Procedure may participate in the negotiations to select a nonIRS co-mediator. Criteria for selecting a
non-IRS co-mediator may include: completion of mediation training; previous
mediation experience; substantive knowledge of tax law; or knowledge of industry
practices. An individual is not eligible to
be a non-IRS co-mediator if the individual
has an official, financial, or personal conflict of interest with respect to the parties,
unless such interest is fully disclosed in

1017

writing to the taxpayer and the Appeals
Team Manager and they agree that the
mediator may serve. See 5 U.S.C. § 573.
All mediators must be neutral. Mediators serve as facilitators, assist in defining
the issues, and promote settlement negotiations between the parties. Mediators
will inform and discuss with the parties
the rules and procedures pertaining to the
mediation process. Mediators do not have
settlement authority and cannot render a
decision regarding any issue in dispute.
The parties will continue to have settlement authority for all issues considered
under the mediation process.
.02 Appeals personnel as mediators
and conflict statement. To address the inherent conflict arising from the Appeals
mediator’s status as an employee of the
IRS, the Appeals mediator will provide to
the taxpayer a statement confirming their
proposed service as a mediator and stating
that (i) they are a current employee of the
IRS, (ii) a conflict results from the continued status as an IRS employee, and (iii)
this conflict will not interfere in the mediator’s ability to facilitate the case impartially. This statement will also be included
in the written agreement to mediate.
SECTION 10. MEDIATION
SESSION
.01 Discussion summaries. Each party
will prepare a discussion summary of the
issues (including the party’s arguments in
favor of the party’s position) for consideration by the mediator. The discussion
summaries should be submitted to the mediator and the other party no later than two
weeks before the mediation session is
scheduled to occur.
.02 Confidentiality. The mediation process is confidential. Therefore, all information concerning any dispute resolution
communication is confidential and may
not be disclosed by any party, participant,
observer, or mediator except as provided
by statute, such as in section 6103 of the
Internal Revenue Code, relating to confidentiality of taxpayer information, and 5
U.S.C. § 574, relating to confidentiality in
federal administrative alternative dispute
resolution proceedings. A dispute resolution communication includes all oral or
written communications prepared for the
purposes of a dispute resolution proceeding. See 5 U.S.C. § 571(5).

December 29, 2014

.03 Ex Parte Contacts With Mediator
Prohibited. To ensure that one party is not
in a position to exert undue influence on
the mediator, ex parte contacts with the
mediator outside the mediation session are
prohibited.
The prohibition against ex parte communications with the mediator is intended
to apply only to unsolicited contacts from
one of the parties with the mediator that
occur outside the mediation session. The
prohibition prevents the mediator from receiving information or evidence from one
party that the other party is unaware of
and is unable to respond to or rebut.
This provision does not prevent the mediator from contacting a party outside
the mediation session, or a party from
answering a question or request posed
by the mediator outside of the mediation
session provided that the information
furnished to the mediator is made available to both parties so that no party is
unaware of or unable to respond to or
rebut the information.
.04 Withdrawal. Either party may withdraw from the process at any time before
reaching a settlement of the issue(s) being
mediated by notifying the other party and
the mediator in writing.
SECTION 11. POST-SESSION
PROCEDURES
.01 Mediator’s report. At the conclusion of the mediation process, the mediator will prepare a brief written report and
submit a copy to each party. See Exhibit 5
of this revenue procedure for a model
mediator’s report.
.02 Closing procedures. If the parties
reach an agreement on all or some of the
issues through the mediation process, Appeals will use established procedures to
close the case, including preparation of a
Form 906, Closing Agreement on Final
Determination Covering Specific Matters.
See Statement of Procedural Rules, 26
C.F.R. § 601.106, Delegation Order 236
(Rev. 3) (addressing settlement authority
for issues in a Coordinated Examination
Program), or § 7122(b) (regarding OIC
cases).
If the parties do not reach an agreement
on an issue being mediated, Appeals will
not reconsider the mediated issue(s), and a
statutory notice of deficiency will be issued with respect to all unagreed issues, or

December 29, 2014

the case will be processed using established closing procedures if there is no
deficiency.
.03 Special closing procedures for certain offer-in-compromise cases. For OIC
cases with liabilities of $50,000 or more,
any settlement or agreement reached
through mediation must be reviewed by
the Office of Chief Counsel pursuant to
section 7122(b) before being finalized.
When review is required, Appeals will
forward the case to Area Counsel for an
opinion as to the legal sufficiency of the
offer. See IRM 5.8.8, Offer in Compromise, Acceptance Processing, and IRM
8.23.4, Appeals Function, Offer in Compromise, Acceptance, Rejection Sustention, and Withdrawal Procedures for nonCollection Due Process (CDP) Offers.
SECTION 12. GENERAL
PROVISIONS
01.Communication with IRS and Counsel Permitted. Except as described in Section 10.03 with respect to mediators, Appeals has the discretion to communicate
with the IRS Office of Chief Counsel, the
originating IRS function, or both, in preparation for or during the mediation session. See Rev. Proc. 2012–18, 2012–10
I.R.B. 455. Appeals also has the discretion
to have Counsel, the originating IRS function, or both, participate in the mediation
proceeding to present the position and
views of the IRS, and to rebut representations and arguments made by the taxpayer. Counsel’s participation in this regard is separate from the review function
outlined in Section 11.03 of this revenue
procedure.
.02 Employees. IRS employees who
participate in or observe the mediation
process in any way, and any person under
contract to the IRS pursuant to section
6103(n) that the IRS invites to participate
or observe, will be subject to the confidentiality and disclosure provisions of the
Internal Revenue Code, including sections
6103, 7213, and 7431.
.03 Section 7214(a)(8) disclosure. Under section 7214(a)(8), IRS employees
must report information concerning violations of any revenue law to the Secretary.
The agreement to mediate will state this
requirement and the parties will acknowledge this duty.

1018

.04 Disqualification of the non-IRS comediator. The non-IRS co-mediator will
be disqualified from representing the
taxpayer in any pending or future action
that involves the transactions or issues
that are the particular subject matter of
the mediation. This disqualification extends to representing any other parties
involved in the transactions or issues
that are the particular subject matter of
the mediation.
(a) Disqualification of co-mediator’s
firm. Moreover, except as provided in section 12.04(b), the co-mediator’s firm will
be disqualified from representing the taxpayer or any other parties involved in the
transactions or issues that are the particular subject matter of the mediation in any
action that involves the transactions or
issues that are the particular subject matter
of the mediation.
(b) Exception to disqualification of comediator’s firm. The co-mediator’s firm
will not be disqualified from representing
the taxpayer or any other parties in any
future action that involves the same
transactions or issues that are the particular subject matter of the mediation,
provided that (i) the co-mediator disclosed the potential of such representation to the parties to the mediation conducted by the co-mediator prior to the
parties’ acceptance of the co-mediator,
(ii) such action relates to a taxable year
that is different from the taxable year
that is the subject matter of the mediation, (iii) the firm’s internal controls
preclude the co-mediator from any form
of participation in the matter, and (iv)
the firm does not apportion to the comediator any part of the fee therefrom.
In the event the co-mediator has been
selected prior to the co-mediator learning of the identity of one or more of the
parties involved in the mediation, requirement (i) will be deemed satisfied if
the co-mediator promptly notifies the
parties of the potential representation.
Although the co-mediator is prohibited
from receiving a direct allocation of the
fee from the taxpayer (or other party) in
the matter for which the internal controls are in effect, the co-mediator will
not be prohibited from receiving a salary, partnership share, or corporate distribution established by prior independent agreement. The co-mediator and

Bulletin No. 2014 –53

his or her firm are not disqualified from
representing the taxpayer or any other
parties involved in the mediation in any
matters unrelated to the transactions or
issues that are the particular subject
matter of the mediation.
This section 12.04 only applies to representations on matters before the IRS.
The provisions of this section 12.04
are in addition to any other applicable
disqualification provisions, including,
for example, the rules of the United
States Tax Court and applicable canons
of ethics.
.05. Recording of mediation session.
The parties to the mediation may not
make a stenographic record, audio or
video tape recording, or other transcript of
the mediation session.
.06 Use as precedent. A settlement
reached by the parties through mediation
will not be binding on the parties (or be
otherwise controlling) for taxable years
not covered by the agreement. Except as
provided in the agreement, no party may
use such settlement as precedent.
SECTION 13. EFFECTIVE DATE
This procedure is effective December
29, 2014, the date this revenue procedure is published in the Internal Revenue Bulletin.
SECTION 14. EFFECT ON OTHER
DOCUMENTS
Revenue Procedure 2009 – 44 and Announcements 2008 –111 and 2011– 6 are
superseded.
DRAFTING INFORMATION
The principal authors of this revenue
procedure are Debra Kohn, Office of
Chief Counsel, Procedure and Administration, Charmaine Osbin, Office of Appeals, Tax Policy and Procedure for
non-collection cases, and Dale Veer, Office of Appeals, Tax Policy and Procedure for OIC and TFRP cases. For further information regarding this revenue
procedure, contact Ms. Kohn at (202)
317-3600, Ms. Osbin at (281) 721-7275,
or Mr. Veer at (651) 726-7430 (not tollfree calls).
2

Exhibit 1: Addresses for Appeals Area
Directors

Director, Area 11 – Collection
IRS Appeals
100 First Street. Suite 2000
San Francisco, CA 94105

Director, Area 1
IRS Appeals
701 Market Street, Suite 2200
Philadelphia, PA 19106-1538

Director, Area 12 – Campus
IRS Appeals
2525 Capitol Street
Fresno, CA 93721-2227

Director, Area 2 – Collection
IRS Appeals
10715 David Taylor Drive
Charlotte, NC 28262

Director, Area 13 – Collection
IRS Appeals
810 Broadway, Suite 300
Nashville, TN 37203-3810

Director, Area 3
IRS Appeals
810 Broadway, Suite 300
Nashville, TN 37203-3810

Director, Appeals Team Case Leaders
IRS Appeals
300 North Los Angeles Street,
Federal Building
Los Angeles, CA 90012-3308

Director, Area 4
IRS Appeals
701 Market St., Suite 2200
Philadelphia, PA 19106-1538

Director, Specialty Operations –
Domestic
IRS Appeals
290 Broadway, 11th Floor
New York, NY 10007

Director, Area 5 – Campus
IRS Appeals
5000 Corporate Drive
Holtsville, NY 11742-2002
Director, Area 6 – Campus
IRS Appeals
3333 Getwell Road, Stop 86E
Memphis, TN 38118-7733
Director, Area 7
IRS Appeals
55 North Robinson
Oklahoma City, OK 73102
Director, Area 8
IRS Appeals
100 First Street. Suite 2000
San Francisco, CA 94105
Director, Area 9
IRS Appeals
6377 Riverside Avenue
Riverside, CA 92506-3124
Director, Area 10 – Campus
IRS Appeals
7125 Industrial Road
Florence, KY 41042-2907

Director, Specialty Operations –
International
IRS Appeals
300 Pearl Street
Buffalo, NY 14202
Exhibit 2: Model Agreement to
Mediate
1. The Mediation2 Process.
The mediation will be an extension of
the Appeals process to help [NAME OF
TAXPAYER] and Internal Revenue Service (IRS)—Appeals (the PARTIES)
reach a negotiated settlement of the issues
to be mediated. See (2) below for the
participants in the mediation process. To
accomplish this goal, the mediator will act
as a facilitator, assist in defining the issues, and promote settlement negotiations
between the PARTIES. The mediator will
inform and discuss with the PARTIES the
rules and procedures pertaining to the mediation process. The mediator will not
have settlement authority and will not ren-

For purposes of this agreement, the term “mediation” refers only to “non-binding mediation” as set forth in section 7123(b)(1).

Bulletin No. 2014 –53

1019

December 29, 2014

der a decision regarding any issue in dispute. The PARTIES will continue to have
settlement authority for all issues considered under the mediation process.

federal tax returns of [NAME OF TAXPAYER] for tax year(s)______________:
(a) Issue #1
(b) Issue #2

tended to prevent the mediator from contacting a PARTY, or a PARTY from
responding to the mediator’s request for
information.

2. Nature of Process, Participants,
Withdrawal.

5. Submission of Materials.

10. Section 7214(a)(8) Disclosure.

Each PARTY will present to the mediator a separate written summation not to
exceed XX pages (exclusive of exhibits
consisting of pre-existing documents and
reports) regarding each issue. The mediator will have the right to ask either
PARTY for additional information before
the mediation session if deemed necessary
for a full understanding of the issues to be
mediated. Each PARTY will simultaneously submit to the other PARTY a copy
of any submission to the mediator.

The PARTIES to this agreement acknowledge that IRS employees involved
in this mediation are bound by the
§ 7214(a)(8) disclosure requirements concerning violations of any revenue law.

6. Place of Mediation.

12. Report by Mediator.

The PARTIES will attempt to select a
site at or near the mediator’s office,
[NAME OF TAXPAYER]’s office, or an
Appeals office.

At the conclusion of the mediation session, the mediator will issue a brief report
to the PARTIES identifying each issue
described in section 4, above, and whether
the PARTIES either agreed to resolve or
did not resolve the issue.

(a) The mediation process is optional.
(b) Each PARTY must have at least
one participant attending the mediation session with decision-making authority. No
later than two weeks before the mediation,
each PARTY will submit to the other
PARTY and the mediator a list of the participants who will attend the mediation session on behalf of or at the request of the
PARTY, including a designation of the person with decision-making authority who
will represent the PARTY at the mediation
session. Each PARTY’s list of participants
will contain the participant’s name, the participant’s position with the PARTY or other
affiliation (e.g., a member of XYZ law firm,
counsel to the taxpayer), and the participant’s address, [optional: telephone number,
and fax number]. All participants attending
the mediation on behalf of or at the request
of a PARTY will be listed on the PARTY’s
list of participants, including witnesses, consultants, and attorneys.
[Insert limitations on the number or
types of participants, if any.]
(c) Either PARTY may withdraw from
the process at any time prior to reaching a
settlement of the issues to be mediated by
notifying the other PARTY and the mediator in writing.

7. Proposed Schedule.
Subject to the approval of the mediator,
the mediation session will be conducted
according to the following schedule:
Submission of Materials to Mediator:
A DATE NO LATER THAN TWO
WEEKS BEFORE THE DATE OF
MEDIATION SESSION
Mediation Session: By MONTH
DAY, YEAR and TIME

3. Selection of Mediator and Costs.

8. Confidentiality.

(a) IRS Appeals will pay the costs
associated with the Appeals mediator.
The taxpayer will pay the cost of a nonIRS co-mediator.
(b) The taxpayer, by signing this agreement, acknowledges that (i) the Appeals
mediator is a current employee of the IRS,
(ii) a conflict results from his or her continued status as an IRS employee, and (iii) this
conflict will not interfere with the mediator’s ability to facilitate the case impartially.

IRS employees who participate in or
observe the mediation process in any way,
and any person under contract to the IRS
pursuant to § 6103(n) of the Internal Revenue Code (including the mediator) that
the IRS invites to participate or observe,
will be subject to the confidentiality and
disclosure provisions of the Internal Revenue Code, including §§ 6103, 7213 and
7431. See also 5 U.S.C § 574.
9. Ex Parte Contacts Prohibited.

4. Issues to be Mediated.
The mediation session will encompass
the following issues in the IRS audit of the

December 29, 2014

There will be no ex parte contacts from
a PARTY to the mediator outside the mediation session. This provision is not in-

1020

11. No Record.
There will be no stenographic record,
audio or video tape recording, or other
transcript of the mediation session(s).

13. Appeals Procedures Apply.
If the mediation process enables the
PARTIES to reach agreement on the issues, Appeals will use established procedures to close the case. Delegation Order
4 –24, IRM 1.2.43.22 (addressing settlement authority for issues in a Coordinated
Examination Program) or § 7122(b) (regarding offer-in-compromise cases) may
apply to settlements resulting from the
mediation process. Appeals will not reconsider the mediated issue(s), and a statutory notice of deficiency will be issued
with respect to all unagreed issues (or the
case will be processed using established
closing procedures if there is no deficiency).
14. Precedential Use.
A settlement reached by the PARTIES
through mediation will not be binding on
the PARTIES (or be otherwise controlling) for taxable years not covered by the
agreement. Except as provided in the
agreement, no PARTY may use such settlement as precedent.

Bulletin No. 2014 –53

INTERNAL REVENUE SERVICE, APPEALS
By: __________________________
Name
Appeals Team Manager
Date: ________________________
NAME OF TAXPAYER
By: __________________________
Name
Title
Date: ________________________
Exhibit 3:
Model Mediation Participants List
Case Name: ___________________________________
Submitted By: _________________________________
Date: _______________________
Please list below all participants attending the mediation, including witnesses, consultants, and attorneys. This form must be sent
to the other PARTY and to the mediator(s) no later than two weeks before the mediation session. Insert an asterisk (*) before the
name of the person who has decision-making authority at the mediation session:
NAME, POSITION AND ADDRESS
(TELEPHONE OR FAX NUMBER OPTIONAL)
Exhibit 4: Consent to Disclose Tax Information
Pursuant to section 6103(c) of the Internal Revenue Code of 1986 (as amended), I hereby consent to the disclosure of return
information (as defined in section 6103(b)(2)) relating to the mediation session between __________________ (Taxpayer) and the
Commissioner of Internal Revenue to be held on ______________ (date), as follows:
The Internal Revenue Service may disclose the taxpayer’s return and return information incident to the mediation to the mediator
and any participants or observers identified in the initial list of participants and to any subsequent participants and observers identified
in writing by the parties.
This consent relates to the mediation session that is the subject of an agreement to mediate dated____________. I am aware that
in the absence of this authorization, the return and return information of _______________ (Taxpayer) is confidential and may not
be disclosed except as authorized by the Internal Revenue Code.
I certify that I have the authority to execute this consent on behalf of Taxpayer.
Taxpayer Name: ________________________________________________
Taxpayer Identification Number: ____________________________________
Taxpayer Address: ______________________________________________
By: [Name of Individual Executing Consent] ________________________
Title: [Title of Individual Executing Consent] _________________________
Signature: _____________________________________________________
Date: _________________________________________________________
Exhibit 5: Model Mediator’s Report
The parties below agreed to mediate their dispute and attended a mediation session on MONTH DAY, YEAR in an attempt to
settle the following issue(s):

Bulletin No. 2014 –53

1021

December 29, 2014

ISSUE:
SETTLEMENT: [ ] Yes [ ] No [ ] Partial
Proposed Adjustment Amount:

Amount Sustained:

ISSUE:
SETTLEMENT: [ ] Yes [ ] No [ ] Partial
Proposed Adjustment Amount:

Amount Sustained:

Settlement documents will be prepared under established Appeals procedures.
DATED this______ day of ____________
____________________________
/s/ Mediator
____________________________
/s/ Party
____________________________
/s/ Party

26 CFR 1.6049.00 – 00: Returns Relating to Payments of Interest
(Also: 1.3406.07– 00 Exceptions to Backup Withholding)

Rev. Proc. 2014 – 64
SECTION 1. PURPOSE
This revenue procedure lists, in Section
3, the countries with which the United
States has in effect an income tax or
other convention or bilateral agreement
relating to the exchange of information
within the meaning of section
6103(k)(4) of the Internal Revenue
Code pursuant to which the United
States agrees to provide, as well as receive, information and under which the
competent authority is the Secretary of
the Treasury or his delegate for purposes
of the reporting required of payors under
§§ 1.6049 – 4(b)(5) and 1.6049 – 8(a) of
the Income Tax Regulations. This revenue procedure also lists, in Section 4,
the countries with which the Treasury
Department and the IRS have determined that it is appropriate to have an
automatic exchange relationship with
respect to the information collected under §§ 1.6049 – 4(b)(5) and 1.6049 – 8.
This revenue procedure updates Rev.
Proc. 2012–24, 2012–20 I.R.B. 913, effective for interest paid on or after January 1, 2015, by adding additional countries to the lists set forth in Sections 3
and 4.

December 29, 2014

SECTION 2. BACKGROUND
Sections 1.6049 – 4(b)(5) and 1.6049 –
8(a), as revised by TD 9584, require the
reporting of certain deposit interest paid to
nonresident alien individuals on or after
January 1, 2013. Section 1.6049 – 4(b)(5)
provides that in the case of interest aggregating $10 or more paid to a nonresident
alien individual (as defined in section
7701(b)(1)(B)) that is reportable under
§ 1.6049 – 8(a), the payor is required to
make an information return on Form
1042–S for the calendar year in which the
interest is paid. Interest that is reportable
under § 1.6049 – 8(a) is interest described
in section 871(i)(2)(A) that relates to a
deposit maintained at an office within the
United States and that is paid to a resident
of a country that is identified, in an applicable revenue procedure (see § 601.601(d)(2))
as of December 31 prior to the calendar
year in which the interest is paid, as a
country with which the United States has
in effect an income tax or other convention or bilateral agreement relating to the
exchange of tax information within the
meaning of section 6103(k)(4), under
which the competent authority is the Secretary of the Treasury or his delegate and
the United States agrees to provide, as
well as receive, information. Rev. Proc.
2012–24 was published contemporaneously with the publication of TD 9584 to
identify those countries with which the
United States has in force an information
exchange agreement, such that interest

1022

paid to residents of such countries must be
reported by payors to the extent required
under §§ 1.6049 – 8(a) and 1.6049 –
4(b)(5). This revenue procedure updates
Rev. Proc. 2012–24 and will be updated
by subsequent revenue procedures as appropriate. As noted in the preamble to the
regulations and Rev. Proc. 2012–24, the
IRS is not required to exchange information with another country, even if an information exchange agreement is in effect, if there are concerns about
confidentiality, safeguarding of data exchanged, the use of the information, or
other factors that would make the exchange of information inappropriate.
SECTION 3. COUNTRIES OF
RESIDENCE WITH RESPECT TO
WHICH THE REPORTING
REQUIREMENT APPLIES
The following are the countries with
which the United States has in effect an
income tax or other convention or bilateral agreement relating to the exchange of
tax information within the meaning of
section 6103(k)(4) pursuant to which the
United States agrees to provide, as well as
receive, information and under which the
competent authority is the Secretary of the
Treasury or his delegate:
Antigua & Barbuda
Aruba
Australia
Austria
Azerbaijan
Bangladesh

Bulletin No. 2014 –53