Rev. Proc. 2023-27

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HIGHLIGHTS
OF THIS ISSUE




Bulletin No. 2023–35
August 28, 2023

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

Rev. Proc. 2023-27, page 655.

This revenue procedure provides clarifying and procedural
guidance applicable to the low-income communities bonus
credit program for the energy investment credit established
pursuant to the Inflation Reduction Act of 2022 (Program).
Under this Program, applicants investing in certain solar and
wind-powered electricity generation facilities may apply for
an allocation of environmental justice solar and wind capacity limitation to increase the amount of an energy investment
credit under section 48 for the taxable year in which the
facility is placed in service. These procedural rules provide
guidance necessary to implement the Program, including,
in relevant part, information an applicant must submit, the
application review process, and the manner of obtaining an
allocation. This revenue procedure is being issued simultaneously with the final regulations applicable to the Program
provided in TD 9979.

Finding Lists begin on page ii.

26 CFR 601.201: Rulings and determination letters.

Rev. Proc. 2023-27
SECTION 1. PURPOSE
This revenue procedure provides the
process under § 48(e) of the Internal
Revenue Code (Code)1 to apply for an
allocation of environmental justice solar
and wind capacity limitation (Capacity
Limitation). Receipt of an allocation
increases the amount of an energy investment credit determined under § 48(a) (§
48 credit) for the taxable year in which
certain solar and wind-powered electricity
generation facilitates are placed in service.
SECTION 2. BACKGROUND
.01 Section 13103 of Public Law 117–
169, 136 Stat. 1818, 1921 (August 16,
2022), commonly known as the Inflation
Reduction Act of 2022 (IRA), added
new § 48(e) to the Code. Section 48(e)
increases the amount of the § 48 credit
with respect to eligible property that is
part of a qualified solar or wind facility
that is awarded an allocation of Capacity
Limitation as part of the low-income
communities bonus credit program for
the energy investment credit (Program).
The § 48 credit for a taxable year is generally calculated by multiplying the basis
of each energy property placed in service

during that taxable year by the energy percentage (as defined in § 48(a)(2)). Section
48(e) increases the § 48 credit by increasing the energy percentage used to calculate the amount of the § 48 credit (§ 48(e)
Increase) in the case of qualified solar and
wind facilities that receive an allocation of
Capacity Limitation.
.02 Section 48(e)(4) directs the
Secretary to establish a program, within
180 days of enactment of the IRA, to allocate amounts of Capacity Limitation to
qualified solar and wind facilities. Notice
2023–17, 2023–10 I.R.B. 505, established
the Low-Income Communities Bonus
Credit Program and provided definitions
and other guidance related to the program.
On June 1, 2023, the Department of the
Treasury (Treasury Department) and the
Internal Revenue Service (IRS) published
in the Federal Register (88 FR 35791) a
notice of proposed rulemaking (REG110412-23, 2023-26 I.R.B. 1098) under
§ 48(e) (Proposed Regulations) relating
to the Low-Income Communities Bonus
Credit Program. A Treasury Decision
adopting the Proposed Regulations
with modifications appears in the Final
Regulations section of 88 FR 55506 (Final
Regulations).
.03 This revenue procedure provides the process for the Low-Income
Communities Bonus Credit Program.
These procedural rules provide guidance
necessary to implement the Low-Income
Communities Bonus Credit Program,

including, in relevant part, information
an applicant must submit, the application
review process, and the manner of obtaining an allocation from the IRS.
SECTION 3. CAPACITY LIMITATION
RESERVATIONS AVAILABLE FOR
ALLOCATION
The amount of Capacity Limitation
available for allocation through the
application process provided in this
Revenue Procedure is limited to the
annual Capacity Limitation of 1.8 gigawatts of direct current capacity for each
of calendar years 2023 and 2024. As
provided in § 1.48(e)-1(g), the annual
Capacity Limitation available for allocation is divided across the four facility
categories described in § 1.48(e)-1(b)(2).
For 2023, the Treasury Department and
the IRS plan to reserve the total annual
Capacity Limitation of 1.8 gigawatts of
direct current capacity as shown in Table
1 below. As described in § 1.48(e)-1(g),
the Treasury Department and the IRS
may later re-allocate these reservations
across facility categories in the event any
category is oversubscribed or has excess
capacity. In addition, as described in the
preamble to the Final Regulations, the
Treasury Department and the IRS may
adjust this initial reservation of capacity in
future guidance as needed to achieve the
goals of the Program and ensure an efficient allocation process.

Table 1
Category 1: Located in a Low-Income Community

700 megawatts

Category 2: Located on Indian Land

200 megawatts

Category 3: Qualified Low-Income Residential Building Project

200 megawatts

Category 4: Qualified Low-Income Economic Benefit Project

700 megawatts

SECTION 4. CATEGORY 1 SUBRESERVATIONS
The 700 megawatts of Capacity
Limitation reserved for Category 1
Facilities will be subdivided for facilities seeking a Category 1 allocation with

1

490 megawatts of Capacity Limitation
reserved specifically for eligible residential behind the meter (BTM) facilities
described in § 1.48(e)-1(i)(2)(ii), including
rooftop solar. The remaining 210 megawatts of Capacity Limitation reserved
for Category 1 is available for applicants

with front of the meter (FTM) facilities
described in § 1.48(e)-1(i)(2)(iii) as well
as non-residential BTM facilities that
meet the requirements of § 1.48(e)-1(i)(2)
(i). As described in § 1.48(e)-1(i)(1), the
Treasury Department and the IRS may
adjust this initial reservation of capacity in

Unless otherwise specified, all “section” or “§” references are to sections of the Code or the Income Tax Regulations (26 CFR part 1).

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August 28, 2023

future guidance based on factors such as
promoting efficient allocation of Capacity
Limitation and allowing like-projects to
compete for an allocation.
SECTION 5. APPLICATION
An applicant (defined in section 6 of
this revenue procedure) must submit an
application to apply for an allocation of
Capacity Limitation. The application must
contain all information, documentation,
and attestations specified in section 7 of
this revenue procedure and any additional
information required by the Department
of Energy’s (DOE) publicly available
written procedures. Applicants must submit applications for a particular category
of facility described in § 1.48(e)-1(b)(2)
(that is, Category 1 Facility, Category 2
Facility, Category 3 Facility, or Category 4
Facility). Applicants may only submit one
application per facility per the allocation
year. DOE will publicly announce opening and closing dates for the application.
SECTION 6. APPLICANT
.01 In general. The owner of the solar
or wind facility is the applicant who
must apply for an allocation of Capacity
Limitation. The owner of the facility is
the recipient of the allocation of Capacity
Limitation.
.02 Disregarded entities. If a qualified solar or wind facility is owned by an
entity that is disregarded as separate from
its owner for federal income tax purposes,
the owner of the disregarded entity is the
owner of the facility and is the applicant.
.03 Partnerships and S corporations. If
a qualified solar or wind facility is owned
by a partnership or S corporation, then the
partnership or S corporation is the owner
of the facility and is the applicant, not the
partners or shareholders.

August 28, 2023

SECTION 7. APPLICATION PROCESS
.01 Registration.
(1) In general. Applications are collected through the portal hosted by the
Department of Energy (portal). Applicants
must follow DOE’s publicly available
procedures to register in the portal and to
submit applications.
(2) Application Submission. The applicant’s application and any required attestations must be submitted under penalties
of perjury and dated by the applicant. The
person submitting the application must
have personal knowledge of the facts.
Further, the application and any required
attestations must be submitted by a person authorized under state law to bind the
applicant. For example, an application
may be authorized by an officer on behalf
of a corporation, a general partner 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 applicant is a member of an affiliated
group filing consolidated returns, the submission also must be authorized by a duly
authorized officer of the common parent
of the group.
.02 Applicant Information. The application must include the following identifying information:
(1) The name of the applicant;
(2) The unique federal taxpayer identification number for the applicant (if
available);
(3) The applicant’s address;
(4) If the applicant is a subsidiary corporation of a consolidated group, the legal
name and federal taxpayer identification
number of the parent corporation of the
consolidated group;
(5) The name and telephone number of
the person submitting the application on
behalf of the applicant; and

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(6) Any other information required
by DOE’s publicly available written
procedures.
.03 Facility Information.
(1) In general. The application must
include the information described in sections 70.02(2) and 7.03(3) of this revenue
procedure.
(2) Facility maximum net output and
nameplate capacity.
(a) Wind facility. Applicants seeking an
allocation for a wind facility must report
the expected maximum net output of the
facility defined as the nameplate capacity of the facility in alternating current.
Wind facilities selected for an allocation
will be awarded an amount of Capacity
Limitation in direct current that is equal to
the facility’s reported nameplate capacity
in alternating current.
(b) Solar facility. Applicants seeking an allocation for a solar facility must
report the expected maximum net output
of the facility as measured in alternating
current and the nameplate capacity of the
facility in direct current. Solar facilities
selected for an allocation will be awarded
an amount of Capacity Limitation in
direct current that is equal to the facility’s reported nameplate capacity in direct
current.
(3) Facility location. Applicants are
required to report the location of the facility, including street address (if applicable)
and coordinates (latitude and longitude).
.04 Documentation.
(1) In general. Applicants must submit
the documentation specified in sections
7.04(2) and 7.04(3) of this revenue procedure with an application for an allocation
of Capacity Limitation. An application is
not complete and may be rejected if any
required documentation is not included.
(2) Facility documentation. The following documents are required for each facility
for which an application is submitted:

Bulletin No. 2023–35

Table 2
Document Requirement
An executed contract to purchase the facility, an executed
contract to lease the facility, or an executed power purchase
agreement for the facility, in their entirety inclusive of any
amendments, appendices, consumer disclosures, and schedules
thereto.
A copy of the final executed interconnection agreement, if
applicable (see below).

FTM2

BTM3 <= 1 MW AC

BTM > 1 MW AC

No

Yes

Yes

Yes

No

Yes

If the facility is located in a market where the interconnection
agreement cannot be signed prior to construction or
interconnection of the facility, a signed conditional approval
letter from the jurisdictional utility and/or an affidavit stating
that an interconnection agreement cannot be executed until after
construction of the facility signed by an individual with authority
to bind the applicant.
If an interconnection agreement is not applicable to the facility
(for example, due to utility ownership), this requirement
is satisfied by a final written decision from a Public Utility
Commission, cooperative board, or other governing body with
sufficient authority that financially authorizes the facility.
(3) Facility category specific document. The application must include the

following documents for the applicable
facility category:
Table 3

Document Requirement
Documentation demonstrating property will be installed on
an eligible residential building.
Plans to ensure tenants receive required financial benefits,
including a draft Benefits Sharing Statement.
If applying under Additional Selection Criteria:
Documentation demonstrating applicant meets Ownership
Criteria Documentation including, but not limited to: IRS
determination letter of tax-exempt status; informational
tax filings (Form 990); tax returns and employment tax
returns4; articles of incorporation or certificate of formation
and by-laws; financial statements prepared by a third-party
and/or certified by an officer of the entity; partnership
agreement; and employee records.

Category 1

Category 2

Category 3

Category 4

No

No

Yes

No

No

No

Yes

No

Yes

Yes

Yes

Yes

As defined in § 1.48(e)-1(i)(2)(iii), for the purposes of the Program, a qualified solar or wind facility is front of the meter (FTM) if it is directly connected to a grid and its primary purpose
is to provide electricity to one or more offsite locations via such grid or utility meters with which it does not have an electrical connection; alternatively, FTM is defined as a facility that is
not BTM. For the purposes of Category 4, a qualified solar or wind facility is also FTM if 50 percent or more of its electricity generation on an annual basis is physically exported to the
broader electricity grid.
3
As defined in § 1.48(e)-1(i)(2)(i), a qualified wind or solar facility is behind the meter (BTM) if (1) it is connected with an electrical connection between the facility and the panelboard or
sub-panelboard of the site where the facility is located, (2) it is to be connected on the customer side of a utility service meter before it connects to a distribution or transmission system (that is,
before it connects to the electricity grid), and its primary purpose is to provide electricity to the utility customer of the site where the facility is located. This also includes systems not connected
to a grid and that may not have a utility service meter, and whose primary purpose is to serve the electricity demand of the owner of the site where the system is located.
4
Redact Taxpayer Identification Numbers (TINs) before submitting tax returns and employment tax returns.
2

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.05 Attestations.
(1) In general. An application must
include attestations specified in sections 7.05(2) and 7.05(3) of this revenue

procedure. An application is not complete
and may be rejected if any required attestation is not included.

(2) For all facilities. The following
attestations are required for each facility
for which an application is submitted:

Table 4
Attestation Requirement
The applicant has site control through ownership, an executed
lease contract, site access agreement or similar agreement
between the property owner and the applicant.

FTM

BTM <= 1 MW AC

BTM > 1 MW AC

For a facility on Indian Lands under 25 U.S. Code § 3501(2)
(A)-(C), applicant has obtained the applicable approval of
the relevant tribal government or Alaska Native Corporation
landowner.
The facility has obtained all applicable federal, state, tribal, and
local non-ministerial permits, or that the facility is not required
to obtain such permits.5
The applicant is in compliance with all federal, state, and local
laws, including consumer protection provisions, and safety
obligations, and that the applicant did not and will not engage in
any unfair or deceptive acts or practices.
The applicant has appropriately sized the facility, or that
customer/offtaker subscriptions will be sized to meet the
customer’s energy needs, considering historical customer load
and/or reasonable future load projections, in accordance with
applicable state and local requirements.
The proposed location of the facility has been determined
suitable for installation.

Yes

No

No

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

(3) Facility and category specific attestations. The application must include the

following attestations for the applicable
facility category:
Table 5

Attestation Requirement
Facility location is eligible.6
Consumer disclosures informing customers of their legal rights and
protections have been provided to customers prior to executing a
contract to subscribe or purchase power from the facility, or lease a
facility.
The applicant will ensure at least 50% of the financial benefits will be
provided to qualified households at 20% bill credit discount rate.
If applying under Additional Selection Criteria: Facility location is
eligible based on PPC/CEJST.7

Category 1
Yes

Category 2
Yes

Category 3
No
Yes
(provided to
tenants as
applicable)

Category 4
No

Yes

Yes

No

No

No

Yes

Yes

No

Yes

Yes

Yes

Non-ministerial permits are permits in which one or more officials or agencies consider various factors and exercise some discretion in deciding whether to issue or deny permits. This
does not include ministerial permits based upon a determination that the request complies with established standards such as electrical or building permits. Non-ministerial permits typically
come with conditions and usually require public notice or hearings. Examples of non-ministerial permits include local planning board authorization, conditional use permits, variances, and
special orders.
6
For Category 1, the facility will be located in a low-income community as defined in the final rules for the Program, specifically § 1.48(e)-1. A map that captures applicable census tracts
will be available in DOE’s publicly available written procedures to assist applicants. For Category 2, the facility will be located on Indian Land as defined in § 2601(2) of the Energy Policy
Act of 1992 (25 U.S.C. 3501(2)).
7
Maps that capture applicable census tracts will be available in DOE’s publicly available written procedures to assist applicants.
5

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658

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SECTION 8. REVIEW AND
SELECTION PROCESS
.01 In general. DOE will review applications and provide a recommendation
to the IRS regarding whether to award
an applicant an amount of Capacity
Limitation with respect to a facility. Based
on DOE’s recommendation, the IRS will
award the applicant a Capacity Limitation
allocation or reject the application.
.02 Order of application review.
(1) First 30 days. At the start of each
program year, there will be a 30-day
period during which time applications will
initially be accepted for each category. All
applications submitted within the 30-day
period will be treated as submitted on the
same date and at the same time.
(2) Rolling application review.
Following the 30-day period, DOE will
generally accept applications on a rolling
basis and will review applications and
provide recommendations to the IRS in
the order applications are received until
the IRS allocates all Capacity Limitation
in a program year. The IRS will award the
applicants in the order that it receives recommendations from DOE.
(3) Lottery. If at the conclusion of the
30-day period described in section 8.02(1)
of this revenue procedure any category or
Category 1 sub-reservation of Capacity
Limitation is oversubscribed (as provided
in §1.48(e)-1(g)), applications in those
oversubscribed categories or sub-reservation will be entered into a lottery to determine the order of DOE’s review. DOE
will first separate applications to group
all applications which purport to meet
additional selection criteria described in
§1.48(e)-1(h)(2) (Ownership Criteria) and
§1.48(e)-1(h)(3) (Geographic Criteria).
These applications will be prioritized and
processed as described in section 8.03 of
this revenue procedure.
(4) Applications submitted after the
30-day period. Applications may still be
submitted in oversubscribed categories
or for the Category 1 sub-reservation
of Capacity Limitation after the 30-day
period and until the close of a program
year. Those applications may be reviewed
in the order received only after DOE’s
review and the IRS’s award determinations regarding all applications submitted

Bulletin No. 2023–35

within the first 30 days. Applications submitted will only be reviewed if there is
remaining Capacity Limitation.
(5) Close of program year. After the
IRS awards all the Capacity Limitation
within each category, or the program year
is closed, DOE will cease review of any
remaining applications. After the end of
the program year, no further action will
be taken on applications submitted but not
awarded an allocation. Applicants may
reapply in the next program year if they
remain eligible.
.03 Processing Additional Selection
Criteria applications.
(1) In general. Fifty percent of the
Capacity Limitation in each facility category will be reserved for qualified solar
or wind facilities meeting the Ownership
Criteria described in §1.48(e)-1(h)(2)
and the Geographic Criteria described in
§1.48(e)-1(h)(3) (Additional Selection
Criteria). As described in § 1.48(e)-1(h)
(1), the Treasury Department and the
IRS may adjust this initial reservation of
capacity in future guidance.
(2) Review of Additional Selection
Criteria applications. Applications purporting to meet an Additional Selection
Criteria are generally evaluated on the
same schedule as other applications unless
a facility category is oversubscribed at
the close of the initial 30-day application period described in section 8.02(2)
of this revenue procedure in which case
such applications are considered first and
other applications are entered into a lottery to determine the order of review (see
section 8.02(3) of this revenue procedure).
If the eligible applications for Capacity
Limitation for facilities that meet at
least one of the two Additional Selection
Criteria exceed the Capacity Limitation
for a category, facilities purporting to meet
both of the Additional Selection Criteria
are reviewed before other applications
within each facility category described in
§ 48(e)(2)(A)(iii) and §1.48(e)-1(b)(2).
Allocations for facilities meeting one or
more of the Additional Selection Criteria
will be made from the 50-percent reserve
for such facilities before additional
amounts reserved for a facility category
are allocated. A lottery will be used to
determine the order of review of applications purporting to meet Additional

659

Selection Criteria if such applications
exceed the Capacity Limitation reserved
for the facility category.
.04 Cure period for application defects.
(1) In general. If the assigned DOE
reviewer identifies a defect with a submitted application, such as missing or
incorrect information or documentation,
the DOE will contact the applicant via the
portal. The reviewer will request that the
applicant submit additional information or
documentation to correct or complete the
application via the portal.
(2) Timing for applicant response.
An applicant that is contacted by a DOE
reviewer to submit additional information
or documentation or provide corrected
information will have 21 business days to
respond and provide such requested information or documentation.
(3) Consequences for failure to respond
or provide information. If an applicant fails to respond and/or provide the
requested information or documentation
within the 21-day cure period, DOE will
cease review and mark the application as
withdrawn. If withdrawn, the applicant
may create and submit a new application
for review at a later date if the facility
remains eligible.
SECTION 9. NOTIFICATION OF
ALLOCATION DECISION FROM IRS
.01 In general. The IRS will send
final decision letters through the portal to
inform applicants of the outcome of the
application process. For any applicant that
receives an award of Capacity Limitation,
the letter will state the amount of the allocated Capacity Limitation.
.02 Allocation amount. The Capacity
Limitation allocated to a facility will be
determined based on the nameplate capacity of the facility as stated in the application. The Capacity Limitation allocation
will be provided in direct current. For
wind facilities, alternating current will
be treated as equivalent to direct current
for purposes of determining the amount
of a Capacity Limitation allocation. The
facility that receives the final allocation of
Capacity Limitation in each facility category or Category 1 sub-reservation may
receive an allocation less than its nameplate capacity.

August 28, 2023

SECTION 10. PLACED IN SERVICE
.01 In general. To satisfy the requirements of §1.48-1(k), for any facility
that received an allocation of Capacity
Limitation, the owner of the facility must
report to the DOE the date the facility was
placed in service.
.02 Documentation and attestation
requirements. To satisfy the requirements
of §1.48-1(k), the owner must provide the
following:
(1) An attestation confirming that there
has been no material ownership and/or
facility changes from the application;
(2) Permission to Operate (PTO) letter (or commissioning report verifying
for off-grid facilities) confirming that the
facility has been placed in service and the
location of the facility being placed in
service;
(3) Final, Professional Engineer (PE)
stamped (if required by applicable state or
local law) as-built design plan, PTO letter
with nameplate capacity listed, or other
documentation from an unrelated party
verifying as-built nameplate capacity;
(4) For Category 3 Facilities, a
Benefits Sharing Statement as defined in
§1.48(e)-1(e)(4);
(5) For Category 4 Facilities, a final
list of low-income households served with
name, address, subscription share, and the
income verification method used; and
(6) For Category 4 Facilities, a spreadsheet demonstrating the expected financial benefit to low-income subscribers to
demonstrate the 20 percent bill credit discount rate.
SECTION 11. EFFECT OF
ALLOCATION OR OTHER
NOTIFICATION
A Capacity Limitation allocation or a
notification that a facility has met the eligibility requirements under the Low-Income
Communities Bonus Credit Program at

August 28, 2023

the time the facility is placed in service
is not a final determination that property
is eligible for an increased credit under §
48(e). The IRS may, upon examination,
determine that property does not qualify
for the increased credit.
SECTION 12. CLAIMING THE
ENERGY PERCENTAGE INCREASE
.01 In general. After the facility is
placed in service, and the applicant submits the additional documentation and
attestations described in §1.48-1(k), the
applicant is notified that it (or the applicable partners or shareholders in the case
of a partnership or an S corporation) may
claim the energy percentage increase on
Form 3468, Investment Credit (or successor form) or Form 3800, General Business
Credit (or successor form), if eligible,
make a transfer election under § 6418, or,
if eligible, make an elective payment election under § 6417.
.02 Reduction in Increased Energy
Percentage. In cases where the facility
size is larger than the allocated capacity
when placed in service (but still below 5
MW AC), the 10 percentage or 20 percentage point increase will be reduced by
a reduction factor which is calculated by
the amount of Capacity Limitation allocated (kW) divided by the total nameplate capacity installed (kW) at the time
the owner of the facility claims the energy
percentage increase under § 48(e). See §
48(e)(2)(B).
SECTION 13. SUCCESSOR IN
INTEREST
.01 In general. Except as otherwise
provided in this section 13, a Capacity
Limitation allocation award applies only
to the taxpayer who applied for and
received an allocation award for the facility the taxpayer owns. If a taxpayer wants
to request a transfer of an allocation, it

660

should refer to DOE’s publicly available
written procedures to initiate a transfer
request with the IRS.
.02 Additional Selection Criteria.
Applicants who received an allocation
based on the Additional Selection Criteria
should refer to §1.48(e)-1(m)(v) regarding potential disqualification if the original applicant does not retain an ownership
interest in an entity that owns the facility or the successor does not provide the
required attestation.
SECTION 14. APPLICABILITY DATE
This revenue procedure applies to
taxable years ending on or after the date
of publication of the Treasury Decision
under § 48(e) 88 FR 55506.
SECTION 15. PAPERWORK
REDUCTION ACT
This revenue procedure is not creating a new collection of information as
described by the Paperwork Reduction
Act (44 U.S.C. 3507(d)). The collections
of information contained within this revenue procedure, and their associated burdens, have been submitted to the Office
of Management and Budget as part of TD
9979 and will be approved under OMB
Control Number 1545-2308.
SECTION 16. DRAFTING
INFORMATION
The principal author of this revenue procedure is the Office of Associate
Chief Counsel (Passthroughs & Special
Industries). However, other personnel
from the Treasury Department and the
IRS participated in its development. For
further information regarding this revenue
procedure, call the energy security guidance contact number at (202) 317-5254
(not a toll-free number).

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