Notice 2024-60

HIGHLIGHTS
OF THIS ISSUE




Bulletin No. 2024–34
August 19, 2024

These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.

EMPLOYEE PLANS

INCOME TAX
Notice 2024-60, page 515.

This notice describes the information that must be included
in a written report described in § 1.45Q-4(c)(2) (LCA Report)

Finding Lists begin on page ii.

and provides the procedures a taxpayer must follow to submit the LCA Report and required supporting information to
the IRS and the Department of Energy for review under §
1.45Q-4(c)(5) before any credit for carbon oxide sequestration allowed under § 45Q(a)(2)(B)(ii) or (a)(4)(B)(ii) is determined for qualified carbon oxide utilized by any taxpayer in
the manner described in § 45Q(f)(5) as implemented by §
1.45Q-4 (§ 45Q utilization credit).

Part III
Required Procedures to
Claim a Section 45Q Credit
for Utilization of Carbon
Oxide
Notice 2024-60
SECTION 1. PURPOSE
This notice describes the information that must be included in a written
report described in § 1.45Q-4(c)(2) of the
Income Tax Regulations (LCA Report)
and provides the procedures a taxpayer
must follow to submit the LCA Report
and required supporting information to the
Internal Revenue Service (IRS) and the
Department of Energy (DOE) for review
under §  1.45Q-4(c)(5) before any credit
for carbon oxide sequestration allowed
under §  45Q(a)(2)(B)(ii) or (a)(4)(B)(ii)
of the Internal Revenue Code (Code) is
determined for qualified carbon oxide
utilized by the taxpayer in the manner
described in §  45Q(f)(5) (§  45Q utilization credit).1 As required by § 1.45Q-4(c)
(6), the IRS must approve the lifecycle
analysis (LCA) of greenhouse gas emissions (as defined in § 1.45Q-4(c)(1)) documented in the LCA Report with respect
to carbon capture equipment placed in service on or after February 9, 2018, before
any §  45Q utilization credit otherwise
satisfying the applicable requirements
of §  45Q and §§  1.45Q-1, 1.45Q-2, and
1.45Q-4 is determined. Accordingly, the
IRS must approve the taxpayer’s LCA
before the taxpayer may claim any § 45Q
utilization credit determined with respect
to a taxpayer on any federal income tax
return for a taxable year beginning on or
after January 13, 2021 (that is, the taxable
years to which § 1.45Q-4 applies).2
The Department of the Treasury (Treasury Department) and the IRS anticipate

issuing proposed regulations to update
§§ 1.45Q-1 through 1.45Q-4 for amendments made by § 13104 of Public Law
117–169, 136 Stat. 1818 (August 16,
2022), commonly known as the Inflation
Reduction Act of 2022 (IRA), as well
as to adopt certain aspects of the guidance provided by this notice. The Treasury Department and the IRS published
final regulations (REG-101607-23) in
the Federal Register (89 FR 17546)
under §§ 1.6417-1 through 1.6417-6 with
respect to any §  45Q utilization credit
determined with respect to a taxable year
beginning after December 31, 2022, as
an applicable credit for purposes of making an elective payment election under
§  6417. Additionally, on June 21, 2023,
the Treasury Department and the IRS
published a notice of proposed rulemaking (REG-101610-23) in the Federal
Register (88 FR 40496), with respect to
any §  45Q utilization credit determined
with respect to a taxable year beginning
after December 31, 2022, as an eligible
credit for purposes of making an election
under § 6418.3
SECTION 2. BACKGROUND
.01 Congress enacted the credit for
the sequestration of carbon dioxide under
§  45Q in §  115 of the Energy Improvement and Extension Act of 2008, Public
Law 110-343, Div. B, Title I, 122 Stat.
3765, 3829 (October 3, 2008). Congress
amended §  45Q several times thereafter,
including significantly by § 41119 of the
Bipartisan Budget Act of 2018, Public
Law 115-123, Div. D, Title II, 132 Stat.
64, 162 (February 9, 2018), to apply to
all carbon oxides, and most recently on
August 16, 2022, by § 13104 of the IRA,
136 Stat. 1924.
.02 Section 45Q(a)(2)(B)(ii) allows a
§ 45Q utilization credit of $10 per metric
ton of qualified carbon oxide captured by

the taxpayer using carbon capture equipment that is originally placed in service
at a qualified facility before February 9,
2018, and utilized by the taxpayer in a
manner described in § 45Q(f)(5).
.03 Section 45Q(a)(4)(B)(ii) allows
a §  45Q utilization credit of the applicable dollar amount (as determined under §
45Q(b)(1)) per metric ton of qualified carbon oxide captured by the taxpayer using
carbon capture equipment that is originally placed in service at a qualified facility on or after February 9, 2018, during
the 12-year period beginning on the date
the equipment was originally placed in
service, and utilized by the taxpayer in a
manner described in § 45Q(f)(5).
.04 Section 45Q(f)(5)(A) provides that
“utilization of qualified carbon oxide”
means (i) the fixation of such qualified carbon oxide through photosynthesis or chemosynthesis, such as through the growing
of algae or bacteria; (ii) the chemical conversion of such qualified carbon oxide to a
material or chemical compound in which
such qualified carbon oxide is securely
stored; or (iii) the use of such qualified
carbon oxide for any other purpose for
which a commercial market exists (with
the exception of use as a tertiary injectant
in a qualified enhanced oil or natural gas
recovery project), as determined by the
Secretary of the Treasury or her delegate
(Secretary).
.05 Section 45Q(f)(5)(B)(i) provides a
methodology to determine the amount of
qualified carbon oxide utilized by the taxpayer. Such amount is equal to the metric
tons of qualified carbon oxide that the taxpayer demonstrates, based upon an LCA
of greenhouse gas emissions and subject
to such requirements as the Secretary, in
consultation with the Secretary of Energy
and the Administrator of the Environmental Protection Agency (EPA), determines
appropriate, were (i) captured and permanently isolated from the atmosphere,

Unless otherwise specified, all “Section” or “§” references are to sections of the Code or the Income Tax Regulations (26 CFR part 1).
Pursuant to § 1.45Q-4(e), taxpayers may choose to apply the rules in § 1.45Q-4 for taxable years beginning on or after January 1, 2018, provided the taxpayer applies §§ 1.45Q-1, 1.45Q2, 1.45Q-3, 1.45Q-4, and 1.45Q-5 in their entirety and in a consistent manner. Alternatively, taxpayers may choose to rely on the rules in § 1.45Q-4 as contained in the notice of proposed
rulemaking (REG-112339-19) published in the Federal Register (85 FR 34050) on June 20, 2020 (2020 proposed regulations), for taxable years beginning on or after February 9, 2018, and
before January 15, 2021, provided the taxpayer follows proposed §§ 1.45Q-1, 1.45Q-2, 1.45Q-3, 1.45Q-4, and 1.45Q-5 of the 2020 proposed regulations in their entirety and in a consistent
manner.
3
Pursuant to § 13801(g) of the IRA, §§ 6417 and 6418 apply to taxable years beginning after December 31, 2022. See 136 Stat. at 2013.
1
2

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515

August 19, 2024

or (ii) displaced from being emitted into
the atmosphere, through use of a process
described in § 45Q(f)(5)(A).
.06 Section 45Q(f)(5)(B)(ii) provides
that for purposes of determining the
amount of qualified carbon oxide utilized
by the taxpayer for purposes of § 45Q(a)
(2)(B)(ii) or (a)(4)(B)(ii), the term “lifecycle greenhouse gas emissions” has the
same meaning given such term under
§  211(o)(1)(H) of the Clean Air Act (42
U.S.C. 7545(o)(1)(H)), as in effect on
February 9, 2018, except that “product” is
substituted for “fuel” each place it appears
in 42 U.S.C. 7545(o)(1)(H).
.07 On June 2, 2020, the Treasury
Department and the IRS published a
notice of proposed rulemaking under §
45Q (REG-112339-19, 85 FR 34050)
(proposed regulations). After consideration of all comments received in response
to the proposed regulations, on January
15, 2021, the Treasury Department and
the IRS published final regulations under
§ 45Q in the Federal Register (T.D. 9944;
86 FR 4728).
.08 For purposes of § 45Q(a)(2)(B)
(ii) or (a)(4)(B)(ii) and § 1.45Q-1(b)(ii)
and (c)(2)(ii), § 1.45Q-4(b)(2) provides
that the amount of qualified carbon oxide
determined to be utilized by the taxpayer
for purposes of computing the § 45Q utilization credit cannot exceed the amount
of qualified carbon oxide measured at the
source of capture.
.09 Section 1.45Q-4(c)(1) provides that
for purposes of determining the amount of
qualified carbon oxide utilized by the taxpayer, the term “lifecycle greenhouse gas
emissions” means the aggregate quantity
of greenhouse gas emissions (including
direct emissions and significant indirect
emissions such as significant emissions
from land use changes)4 related to the full
product life cycle, including all stages
of product and feedstock production and
distribution, from feedstock generation
or extraction through the distribution and
delivery and use of the finished product
to the ultimate consumer, with the mass
values for all greenhouse gases adjusted
to account for their relative global warming potential according to Table A-1 of 40
CFR Part 98 subpart A. Such emissions
4
5

are expressed in carbon dioxide equivalent (CO2-e).
.10 Section 1.45Q-4(c)(2) provides
that the taxpayer verifies the amount of
qualified carbon oxide utilized through an
LCA. An LCA must demonstrate that the
proposed system, inclusive of the taxpayer’s process, results in a net reduction of
CO2‑e compared to a comparison system.
SECTION 3. LCA REPORT
STANDARDS AND REQUIREMENTS
.01 LCA Report. Section 1.45Q-4(c)
(2) requires that the results of a taxpayer’s LCA be documented in a written LCA
Report. In the case of a taxpayer that owns
multiple qualified facilities for which it
wishes to claim a § 45Q utilization credit,
a separate LCA Report is required for each
qualified facility.
.02 LCA Report Standards. Section
1.45Q-4(c)(3) requires that an LCA
Report be prepared in conformity with
and contain documentation that conforms
with International Organization for Standardization (ISO) 14040:2006, Environmental management – Life cycle assessment – Principles and framework and ISO
14044:2006, Environmental management
— Life cycle assessment — Requirements
and guidelines. To ensure conformity with
these ISO standards, the LCA Report must
be completed in accordance with the most
current revision, as of the beginning of the
year in which the LCA is submitted, of the
DOE’s National Energy Technology Laboratory’s (NETL) Carbon Dioxide Utilization (CO2U) Life Cycle Analysis Guidance for the U.S. DOE Office of Fossil
Energy and Carbon Management and 45Q
Addendum to the CO2U LCA Guidance
Document:
https://www.netl.doe.gov/
LCA/CO2U (NETL CO2U LCA Guidance Document) and https://www.netl.
doe.gov/LCA/CO2U/45Q (NETL 45Q
Addendum).5 Section 1.45Q-4(c)(3) further provides that an LCA may consist of
direct and indirect data in conformity with
ISO 14040:2006 and 14044:2006. Direct
and indirect data are also generally known
within ISO standards as primary and secondary data. For purposes of § 45Q, an
LCA must rely upon direct, or primary,

data to address the actual operational performance of the taxpayer’s system for the
taxable year for which the LCA Report is
submitted.
.03 Independent Third-Party Statement. Section  1.45Q-4(c)(4) provides
that an LCA Report must be performed or
verified by an independent third party. If
an independent third-party review is conducted, then it must include an assessment
of an LCA model and supporting data
and be performed in accordance with ISO
14071:2014, Environmental management
— Life cycle assessment — Critical review
processes and reviewer competencies:
Additional requirements and guidelines
to ISO 14044:2006. An LCA Report also
must provide a statement documenting
the qualifications of the independent third
party, including proof of appropriate U.S.
or foreign professional license, and an
affidavit from the third party stating that
it is independent from the taxpayer. If a §
45Q(f)(3)(B) election has been made, then
the affidavit must state that the third party
is independent from both the electing taxpayer and the credit claimant. In addition,
the statement must be made under penalties of perjury.
.04 LCA Report Cover Page Requirements. The LCA Report must include a
cover page that includes the following
information:
(1) Name and location of the facility
where the qualified carbon oxide is utilized (utilization facility);
(2) Name and Taxpayer Identification
Number (TIN) (for example, Employer
Identification Number (EIN)) of the taxpayer claiming the credit based on the
LCA Report;
(3) Name and TIN (for example, EIN)
of the operator of the utilization facility (if
other than the taxpayer);
(4) Taxable year for which the LCA
Report is being submitted;
(5) Name, relationship to the taxpayer,
mailing address, email address, and phone
number of a person whom the IRS can
contact regarding the LCA Report. If this
person is not an employee of the taxpayer,
an IRS Form 2848, Power of Attorney
and Declaration of Representative, must
accompany the LCA Report;

See 42 U.S.C. 7545(o)(1)(H) (Clean Air Act).
See the preamble to T.D 9944, 89 FR 4728, 4745.

August 19, 2024

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Bulletin No. 2024–34

(6) An attestation that the applicable
requirements of § 45Q and §§  1.45Q-1,
1.45Q-2, and 1.45Q-4 are satisfied. Such
attestation must include confirmation of
the following:
(a) the carbon oxide for which the
§ 45Q utilization credit is being claimed is
qualified carbon oxide within the meaning
of § 45Q(c);
(b) the qualified carbon oxide for
which the § 45Q utilization credit is being
claimed is captured by a qualified facility
within the meaning of § 45Q(d);
(c) the qualified carbon oxide for
which the § 45Q utilization credit is
being claimed was captured in the United
States (within the meaning of § 638(1)),
or a U.S. territory (within the meaning
of the term “possession” set forth in
§ 638(2));
(d) in the case of a resubmission of
an LCA Approval Request under section
6.02 of this notice, that there has been no
Material Change (within the meaning of
section 6.04 of this notice) since the prior
LCA was approved; and
(7) A declaration, applicable to the
LCA Approval Request (including the
LCA and the cover page information
required by section 3.04 of this notice)
signed by a person currently authorized to
bind the taxpayer in these matters, in the
following form:
“Under penalties of perjury, I declare
that I have examined the information
contained in this affirmative statement
and the documents that substantiate
this affirmative statement, and to the
best of my knowledge and belief, it is
true, correct, and complete.”
SECTION 4. LCA APPROVAL
REQUEST PROCEDURES
.01 Overview. A taxpayer satisfies
the procedural requirements of §  1.45Q4(c)(5) by submitting an LCA Approval
Request to the IRS and a duplicate to the
DOE for its technical review. An LCA
Approval Request must include:
(1) An LCA Report meeting all applicable requirements of section 3 of this
notice;
(2) Supplemental information that supports the LCA Report data (as described in
section 4.02 of this notice);

Bulletin No. 2024–34

(3) An Independent Third-Party Statement (as defined in section 3.03 of this
notice); and
(4) If an independent third party has
performed the LCA analysis and prepared
the LCA Report, an LCA model.
.02 Supplemental Information. For purposes of section 4.01(2) of this notice, the
supplemental information that supports
the LCA Report data must contain all necessary details supporting the LCA Report
data, calculations, and conclusions. For
example, supplemental information may
include (as applicable) the proposed system’s production and maintenance schedules, periods of other stoppages and interruptions, the actual throughput while in
production, changes in the supplied input
energy and materials and ingredients
(such as chemical composition, concentration, and system-poisoning impurities),
and deviations from the actual process
technology from the description in the
LCA Report. Additionally, a taxpayer
must disclose (to the IRS only) whether
any previously-filed claim for the §  45Q
utilization credit was adjusted and why it
was adjusted.
.03 Submission of the LCA Approval
Request. The IRS and the DOE will accept
LCA Approval Requests submitted by taxpayers on a rolling basis. A taxpayer must
submit a LCA Approval Request to the
IRS and a copy to the DOE using the procedures provided in this section 4.
(1) Submissions to the IRS. Taxpayers
must mail the LCA Approval Request
(including the model if the LCA Report
was not verified by an independent third
party) on a USB thumb drive, to:
Internal Revenue Service
Office of Associate Chief Counsel
(PSI)
1111 Constitution Ave, N.W.
Branch 6 (CC:PSI:6), Room 5114
Washington, DC 20224
Taxpayers also must fax or e-fax a
complete LCA Approval Request to the
IRS at (844) 255-4817.
(2) Submissions to the DOE. When
a taxpayer submits an LCA Approval
Request to the IRS, the taxpayer also must
send an email to the DOE at LCA45Q@
hq.doe.gov indicating the taxpayer’s
intent to submit an LCA for DOE technical review. The DOE will respond with
instructions for submitting a copy of the

517

LCA Approval Request and any subsequent information directly to the DOE.
SECTION 5. LCA APPROVAL
REQUEST REVIEW
.01 Overview of LCA Approval Request
Review. The IRS will first review the
LCA Approval Request for completeness
and adequacy of the materials provided.
This review is based on (i) the material provided in the LCA Report and (ii)
any other materials provided by the taxpayer as required under sections 3 and
4 of this notice. If the IRS finds that the
LCA Approval Request is complete, then
the IRS will request a technical review
by DOE (DOE Technical Review). The
LCA Approval Request Review generally
will be completed within four (4) months
of the date of receipt of a complete LCA
Approval Request (Review Period). If the
LCA Approval Request is incomplete, or
either the DOE or the IRS need to request
any additional or clarifying information
from the taxpayer, then the LCA Approval
Request Review may not be completed
within the Review Period.
.02 Incomplete LCA Approval Request.
(1) If any required information is missing from an LCA Approval Request, then
the IRS will contact the taxpayer directly
by fax, e-fax, or phone. The taxpayer will
have forty-five (45) calendar days from
the date of this request by the IRS to provide the required information to both the
IRS and DOE.
(2) Taxpayers should submit any supplemental information requested by the
IRS by fax or e-fax at (844) 255-4817.
(3) If the taxpayer does not furnish the
supplemental information to the IRS and
DOE within forty-five (45) calendar days
from the date of the IRS request, then the
IRS generally will deny the taxpayer’s
LCA Approval Request in writing. The
IRS may grant an extension to the 45-day
response period on a case-by-case basis
if a taxpayer experienced a force majeure
event. The taxpayer must request an
extension in writing before the end of the
45-day period and provide an explanation
of why an extension is necessary.
(4) Taxpayers should also submit any
supplemental information requested by
the IRS to the DOE at [email protected].
gov.

August 19, 2024

.03 DOE Technical Review Process.
Section 1.45Q-4(c)(6) provides that an
LCA Report will be subject to a DOE
Technical Review. The DOE Technical
Review may be either a Conformance
Review or a Critical Review.
(1) Conformance Review.
(a) Defined. A Conformance Review
is a type of DOE Technical Review conducted to ensure that an LCA conforms
to applicable ISO 14040:2006 and ISO
14044:2006 standards and the latest revision, as of the beginning of the year in
which the LCA is submitted, of NETL’s
Carbon Dioxide Utilization (CO2U) Life
Cycle Analysis Guidance for the U.S.
DOE Office of Fossil Energy and Carbon
Management and 45Q Addendum to the
CO2U LCA Guidance Document.
(b) Procedure. The DOE will perform
a Conformance Review if a taxpayer’s
LCA Approval Request includes an LCA
Report that has been verified by an independent third party as adhering to applicable standards and best practices. Upon
performing a Conformance Review,
the DOE may determine that a Critical
Review is warranted.
(2) Critical Review.
(a) Defined. A Critical Review is a type
of DOE Technical Review conducted to
ensure that an LCA Approval Request
conforms to applicable ISO 14040:2006
and ISO 14044:2006 standards and the
NETL’s Carbon Dioxide Utilization
(CO2U) Life Cycle Analysis Guidance for
the U.S. DOE Office of Fossil Energy and
Carbon Management and 45Q Addendum to the CO2U LCA Guidance Document. The scope of the Critical Review is
expanded beyond the scope of the Conformance Review to include a detailed technical assessment of the LCA model and
supporting data.
(b) Procedure. The DOE will perform a Critical Review if a taxpayer’s
LCA Approval Request includes an LCA
Report that has not been verified by an
independent third party. Additionally, the
DOE may perform a Critical Review if
the DOE determines that further review
is warranted after performing a Conformance Review.
(3) DOE Requests for Supplemental
Information. Upon receipt of an LCA
Approval Request, the DOE will review
the LCA Approval Request for complete-

August 19, 2024

ness and identify any questions for the
taxpayer. The DOE will contact the taxpayer if additional or clarifying information is needed to complete the Technical
Review and will send questions directly
to the taxpayer by email to expedite the
review process. In response to the DOE’s
request for additional information, taxpayers must provide all supplemental
information to both the DOE and the IRS
within forty-five (45) calendar days from
the date of the DOE request (in the manner described in section 4 of this notice).
If the taxpayer does not furnish the supplemental information to the DOE and
to the IRS (in the manner described in
section 4 of this notice) within forty-five
(45) calendar days from the date of the
DOE request, then the IRS generally
will deny the taxpayer’s LCA Approval
Request in writing. The IRS may grant
an extension to the 45-day response
period on a case-by-case basis if a taxpayer experienced a force majeure event.
The taxpayer must request an extension
in writing before the end of the 45-day
period and provide an explanation of
why an extension is necessary. The DOE
will not otherwise communicate with
taxpayers about the status of a pending
LCA Approval Request.
(4) Upon completion of its Technical Review, the DOE will notify the IRS
whether it concurs with the results of the
Taxpayer’s LCA Report.
.04 IRS Determination – (1) In General. Section 1.45Q-4(c)(6) provides that
the IRS will determine whether to approve
the LCA and will notify the taxpayer.
The taxpayer must receive approval of
the taxpayer’s LCA prior to claiming the
§ 45Q utilization credit on any federal
income tax return. The IRS will determine
whether to approve a complete LCA based
on its review and the results of the DOE
Technical Review.
(2) Effect of LCA Review and Determination. Review of the LCA is neither an
examination nor an inspection of books
for purposes of § 7605(b) and will not
preclude or impede (under § 7605(b) or
any administrative provisions adopted by
the IRS) the IRS from later examining a
return or inspecting books or records with
respect to any taxable year for which the §
45Q utilization credit is claimed. Approval
of the LCA does not mean that the IRS has

518

determined that all of the requirements of
§ 45Q have been satisfied.
.05 Notification of Approval or Denial
of LCA. The IRS will notify the taxpayer
of the approval or denial of the taxpayer’s
LCA in writing.
.06 Resubmission after Denial of LCA.
(1) Allowance. If an LCA is denied, and
the deficiencies in the LCA can be cured,
then the taxpayer may revise the taxpayer’s LCA Approval Request and resubmit it to the IRS and DOE (in the manner
described in section 4 of this notice).
(2) Procedures for Resubmission After
Denial. A resubmission under this section 5.06 must state in the cover page
of its LCA Report (described in section 3.04 of this notice) that the LCA
Approval Request is being resubmitted
after a denial by the IRS. The resubmitted
LCA Approval Request should explain in
detail the reasons why the original LCA
Approval Request was denied and how
the resubmitted LCA Approval Request
differs from the original LCA Approval
Request.
.07 IRS Administrative Review. If an
LCA is denied solely on the basis of the
IRS review in section 5.01 of this notice
(excluding a denial on the basis of completeness), then the taxpayer will have an
opportunity to request an IRS administrative review of that denial.
SECTION 6. REQUIREMENTS FOR
REAPPROVAL OF AN APPROVED
LCA
.01 Overview. Except as provided in
sections 6.03 and 6.04 of this notice, a
taxpayer may treat an approved LCA as
approved for the taxable year for which
the LCA Report was submitted and the
following two taxable years (three-year
approval period). Alternatively, a taxpayer may choose to submit a new LCA
Approval Request to the IRS and the DOE
(in the manner described in section 4 of
this notice) for any taxable year.
.02 Periodic Resubmissions. A taxpayer wishing to claim the § 45Q utilization credit after the three-year approval
period must submit a new LCA Approval
Request to the IRS and the DOE (in the
manner described in section 4 of this
notice). If the IRS approves this LCA,
then a new three-year approval period will

Bulletin No. 2024–34

apply (unless the LCA analyzes a period
of less than six months or there is a Material Change (as defined in section 6.04(1)
of this notice)).
(1) Example. X, a calendar year taxpayer, utilizes qualified carbon oxides
in 2022 in the manufacture of a product
for which a commercial market exists.
In 2023, X submits an LCA Approval
Request to the IRS and the DOE analyzing
X’s utilization data for all twelve months
of 2022. The IRS approves the LCA in
2023. X claims a § 45Q utilization credit
on X’s 2022 tax return. X may rely on the
LCA to claim a §  45Q utilization credit
for 2023 and 2024 provided that it follows
the requirements in section 6.04(3) of this
notice. If X wishes to claim a § 45Q utilization credit for 2025, it will need to submit a new LCA Approval Request to the
IRS and the DOE for 2025.
(2) Procedures for Periodic Resubmissions. A resubmission under this section 6.02 must state in its cover report
(described in section 3.04 of this notice)
that the LCA Approval Request is being
resubmitted under section 6.02 of this
notice.
.03 Resubmission after Limited Initial
Period. If a taxpayer submits the taxpayer’s initial LCA Approval Request for an
LCA that analyzes a period of less than six
(6) months, then the taxpayer may treat the
approved LCA as approved for the taxable
year for which the LCA Report is submitted and the following taxable year (twoyear approval period). A taxpayer wishing
to claim the § 45Q utilization credit after
the two-year approval period must submit
a new LCA Approval Request to the IRS
and the DOE (in the manner described
in section 4 of this notice). If the IRS
approves this new LCA, then a new threeyear approval period will apply (unless
the LCA analyzes a period of less than six
months or there is a Material Change (as
defined in section 6.04(1) of this notice)).
(1) Example. X, a calendar year taxpayer, begins utilizing qualified carbon
oxides in August 2022 in the manufacture of a product for which a commercial
market exists. In 2023, X submits an LCA
Approval Request to the IRS and the DOE
analyzing X’s utilization data for five
months of 2022. The IRS approves the
LCA in 2023. X claims a § 45Q utilization
credit on X’s 2022 tax return. X may rely

Bulletin No. 2024–34

on the LCA to claim a §  45Q utilization
credit for 2023 provided that it follows
the requirements in section 6.04(3) of this
notice. If X wishes to claim a § 45Q utilization credit for 2024, then it will need to
submit a new LCA Approval Request to
the IRS and the DOE for 2024. Thereafter,
X will be subject to the periodic resubmission requirements in section 6.02 of this
notice.
(2) Procedures for Resubmissions after
Limited Initial Period. A resubmission
under this section 6.03 must state in the
cover page of its LCA Report (described
in section 3.04 of this notice) that the LCA
Approval Request is being resubmitted
under section 6.03 of this notice.
.04 Resubmission due to Material
Change.
(1) Material Change Defined. A Material Change is any change to the taxpayer’s process described in the LCA that
reduces the “Life Cycle Displacement
Factor” (DF) by an amount greater than
0.05 from the value of that metric from
the taxable year in which the original LCA
was approved by the IRS (Original DF).
(a) Life Cycle Displacement Factor. The value of the DF is a ratio that
measures the amount of carbon dioxide
equivalents displaced per unit of carbon
oxide captured and utilized as defined in
the NETL’s 45Q Addendum to the CO2U
LCA Guidance Document. The change
in the DF is calculated separately for
each of the two subsequent taxable years
after the Original DF is determined. The
change in the DF is calculated as the difference between the Original DF and the
DF for the applicable subsequent taxable
year (DFn). A Material Change occurs if
the Original DF exceeds the DF for the
applicable subsequent taxable year by an
amount greater than 0.05 of the Original
DF as shown in the following formula:
Original DF – DFn (subsequent taxable year 1 or 2) >
0.05
(b) Calculation of Displacement
Factor in Taxable Years Subsequent to
Approval of Original LCA for Determination of Material Change. The taxpayer
must calculate DFs for subsequent taxable
years using only the changes that have
affected the per unit carbon oxide utilization product direct inputs and outputs

519

(and the associated emissions) for the taxpayer’s process described in the proposed
system in the original LCA to determine
whether there has been a Material Change.
This Material Change determination will
be subject to review by the IRS and the
DOE.
(2) Procedures for Resubmission
due to Material Change. If a Material
Change (as defined in section 6.04(1) of
this notice) occurs, then a taxpayer must
resubmit the taxpayer’s LCA to the IRS
and the DOE (in the manner described
in section 4 of this notice). The taxpayer
must receive approval of the taxpayer’s
resubmitted LCA from the IRS and DOE
before a §  45Q utilization credit may be
determined for any additional taxable year
on Form 8933, Carbon Oxide Sequestration Credit. A resubmission under this
section 6.04 must state in the cover page
of its LCA Report (described in section
3.04 of this notice) that the LCA is being
resubmitted due to a Material Change and
explain the Material Change.
(3) Procedures if no Material Change
Exists. A taxpayer must calculate DFs
as provided in section 6.04(1)(b) of this
notice to determine whether a Material
Change has occurred during each taxable
year between required resubmissions to
the IRS and the DOE. Based on this annual
self-assessment, if the taxpayer finds that
no Material Change has occurred, the
taxpayer may treat the approved LCA as
approved for the remainder of the threeyear approval period in section 6.01 of
this notice or the two-year approval period
in section 6.03 of this notice as long as the
taxpayer continues to use the Original DF
in that approved LCA for calculating the
taxpayer’s § 45Q utilization credit. The
taxpayer must make an affirmative statement that no Material Change has occurred
within the taxable year and append the
statement to the Form 8933 on which the
§  45Q utilization credit is claimed. The
taxpayer must satisfy the recordkeeping
requirements of § 6001 and § 1.6001–1 to
support the taxpayer’s determination that
no Material Change has occurred. After
review of the affirmative statement, the
IRS may contact the taxpayer stating that
an updated LCA submission is necessary.
The affirmative statement must provide
the following information:

August 19, 2024