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This notice extends the transitional relief from backup withholding taxes and associated penalties in Notice 2024-56 for any broker that fails to withhold and pay the backup withholding tax for: (1) any sale of a digital asset effected by a broker during calendar year 2026; and, (2) any sale of a digital asset effected by a broker during calendar year 2027 for a customer, if the broker submits that customer¡¯s name and tax identification number (TIN) combination to the IRS¡¯s TIN Matching Program and receives a response that the name and TIN combination matches IRS records. This notice also extends the transitional relief from penalties in Notice 2024-56 for brokers who fail to backup withhold and pay the full backup withholding tax due, if such failure is due to a decrease in the value of withheld digital assets in a sale of digital assets in return for different digital assets effected during calendar year 2027, and the broker immediately liquidates the withheld digital assets for cash. Finally, this notice also provides new transitional relief from information reporting penalties and from backup withholding taxes and associated penalties for any sale of a digital asset effected by a broker during calendar year 2027 for certain customers that have not been previously classified by the broker as U.S. persons.

This notice sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for May 2025 used under ¡ì 417(e)(3)(D), the 24-month average segment rates applicable for June 2025, and the 30-year Treasury rates, as reflected by the application of ¡ì 430(h)(2)(C)(iv).

The notice announces the inflation adjustment factor and phase-out amount for the enhanced oil recovery credit for taxable years beginning in the 2025 calendar year. The notice concludes that because the reference price for the 2024 calendar year ($74.48) exceeds $28 multiplied by the inflation adjustment factor for the 2025 calendar year ($28 multiplied by 2.1115 = $59.12) by $15.36, the enhanced oil recovery credit for qualified costs paid or incurred in 2025 is phased-out completely.

The notice provides the applicable reference price for qualified natural gas production from qualified marginal wells during taxable years beginning in calendar year 2025 for the purpose of determining the marginal well production credit under IRC ¡ì 45I. The applicable reference price for taxable years beginning in calendar year 2025 is $1.64 per 1,000 cubic feet. The notice also provides the credit amount used for the purpose of determining the marginal well production credit. The credit amount for taxable years beginning in calendar year 2025 is $0.79 per 1,000 cubic feet.

Section 43(a) of the Internal Revenue Code provides that for purposes of section 38, the enhanced oil recovery credit for any taxable year is an amount equal to 15 percent of the taxpayer¡¯s qualified enhanced oil recovery costs for such taxable year.

Section 43(b)(1) provides that the amount of the credit determined under subsection (a) for any taxable year shall be reduced by an amount which bears the same ratio to the amount of such credit (determined without regard to this paragraph) as ¡ª (A) the amount by which the reference price for the calendar year preceding the calendar year in which the taxable years begins exceeds $28, bears to (B) $6.

Section 43(b)(3)(B) requires the Secretary to publish an inflation adjustment factor. The enhanced oil recovery credit under ¡ì 43 for any taxable year is reduced if the ¡°reference price,¡± determined under ¡ì 45K(d)(2)(C), for the calendar year preceding the calendar year in which the taxable year begins is greater than $28 multiplied by the inflation adjustment factor for the current calendar year.

The term ¡°inflation adjustment factor¡± means, with respect to any calendar year, a fraction the numerator of which is the GNP implicit price deflator for the preceding calendar year and the denominator of which is the GNP implicit price deflator for 1990.

Because the reference price for the 2024 calendar year ($74.48) exceeds $28 multiplied by the inflation adjustment factor for the 2025 calendar year ($28 multiplied by 2.1115 = $59.12) by $15.36, the enhanced oil recovery credit for qualified costs paid or incurred in 2025 is phased out completely.

Table 1 contains the GNP implicit price deflator used for the 2024 calendar year, as well as the previously published GNP implicit price deflators used for the 1991 through 2023 calendar years.

* Beginning in 1995, the GNP implicit price deflator was rebased relative to 1992. The 1990 GNP implicit price deflator used to compute the 1996 ¡ì 43 inflation adjustment factor is 93.6.

** Beginning in 1997, two digits follow the decimal point in the GNP implicit price deflator. The 1990 GNP price deflator used to compute the 1998 ¡ì 43 inflation adjustment factor is 93.63.

*** Beginning in 1999, the GNP implicit price deflator was rebased relative to 1996. The 1990 GNP implicit price deflator used to compute the 2000 ¡ì 43 inflation adjustment factor is 86.53.

**** Beginning in 2003, the GNP implicit price deflator was rebased, and the 1990 GNP implicit price deflator used to compute the 2004 ¡ì 43 inflation adjustment factor is 81.589.

Beginning in 2009, the GNP implicit price deflator was rebased, and the 1990 GNP implicit price deflator used to compute the 2010 ¡ì 43 inflation adjustment factor is 72.199.

* Beginning in 2011, the 1990 GNP implicit price deflator used to compute the 2012 ¡ì 43 inflation adjustment factor is 72.260.

** Beginning in 2013, the GNP implicit price deflator was rebased, and the 1990 GNP implicit price deflator used to compute the 2014 ¡ì 43 inflation adjustment factor is 66.803.

*** Beginning in 2014, the 1990 GNP implicit price deflator used to compute the 2015 ¡ì 43 inflation adjustment factor is 66.732.

**** Beginning in 2018, the 1990 GNP implicit price deflator used to compute the 2019 ¡ì 43 inflation adjustment factor is 63.637.

Beginning in 2021, the 1990 GNP implicit price deflator used to compute the 2022 ¡ì 43 inflation adjustment factor is 63.604.

* Beginning in 2023, the 1990 GNP implicit price deflator used to compute the 2024 ¡ì 43 inflation adjustment factor is 59.266.

Table 2 contains the inflation adjustment factor and the phase-out amount for taxable years beginning in the 2025 calendar year as well as the previously published inflation adjustment factors and phase-out amounts for taxable years beginning in the 1991 through 2024 calendar years.

This notice extends for an additional year the transitional relief provided in sections 3.01, 3.02, and 3.06 of Notice 2024-56, 2024 29 I.R.B. 64 (July 15, 2024). Specifically, this notice provides transitional relief from penalties with respect to certain information reporting obligations under section 6045¹ and also provides transitional relief from the liability for the payment of backup withholding tax required to be withheld under section 3406 and its accompanying regulations as well as from penalties for brokers who fail to pay that tax with respect to certain sales of digital assets required to be reported under section 6045.

This notice also provides additional transitional relief from penalties to brokers with respect to sales of digital assets effected for certain customers that have not been previously classified by the broker as U.S. persons.

.01 Section 6045 and the Final Regulations

Section 6045(a) provides that every person doing business as a broker shall make a return to the Internal Revenue Service (IRS) showing the name and address of each customer, with details regarding gross proceeds and other information as required. These rules apply when required by the Secretary of the Treasury or the Secretary¡¯s delegate (Secretary) and in accordance with regulations prescribed by the Secretary. On July 9, 2024, the Department of the Treasury (Treasury Department) and the IRS published Treasury Decision 10000 in the Federal Register (89 FR 56480) (final regulations) to require brokers to file information returns on Form 1099-DA and furnish payee statements reporting gross proceeds for sales of digital assets effected on or after January 1, 2025 and, in certain circumstances, adjusted basis on sales of digital assets effected for customers for sales of digital assets effected on or after January 1, 2026.

Section 1.6045-1(g)(1) provides that no return of information is required with respect to a sale effected for a customer that is considered to be an exempt foreign person. Under sections 1.6045-1(g)(4)(ii)(B) and (g)(4)(vi)(A)(1), a broker effecting a sale of digital assets may treat a customer as an exempt foreign person if the broker receives valid documentation upon which it may rely for this purpose (for example, Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)).

.02 Sections 6721, 6722, and 6724

Section 6721 imposes a penalty for any failure to file an information return on or before the required filing date and for any failure to include all the information required to be shown on a return or the inclusion of incorrect information. Section 6724(d)(1)(B)(iii) defines an information return for this purpose as a return required by section 6045(a) or (d).

Section 6722 imposes a penalty for any failure to furnish a payee statement on or before the required furnishing date to the person to whom such statement is required to be furnished and for any failure to include all the information required to be shown on a payee statement or the inclusion of incorrect information. Section 6724(d)(2)(H) defines a payee statement for this purpose as a statement required by section 6045(b) or (d).

Section 6724 provides that no penalty shall be imposed under sections 6721 and 6722 if the filer (payor) shows that the failure was due to reasonable cause and was not due to willful neglect.

.03 Sections 3403 and 3406

Section 3406(a)(1) requires certain payors of reportable payments to deduct and withhold a tax, equal to the fourth lowest rate of tax applicable under section 1(c) (currently 24 percent), from that payment (backup withholding tax) if the payee fails to furnish the payee¡¯s tax identification number (TIN) to the payor in the manner required or if the IRS notifies the payor that the name and TIN combination reported by the payor to the IRS for the payee is incorrect. Under section 3406(b)(3)(C), a reportable payment includes payments made by a payor that are required to be shown on an information return filed by a broker under section 6045. Pursuant to sections 31.3406(d)-1 and 31.3406(h)-3(a)(1), a payee that is not an exempt foreign person must generally furnish to the broker on a Form W-9, Request for Taxpayer Identification Number and Certification, the payee¡¯s TIN and certify under penalties of perjury that the furnished TIN is correct (certified TIN).

A broker required to file Form 1099-DA with respect to a payee¡¯s digital asset transaction is also required to report to the IRS the amount of backup withholding tax the broker withheld from the payee on Form 945, Annual Return of Withheld Federal Income Tax, and on Form 1099-DA. The broker must also furnish a statement with this information to the payee. The payee may then report this tax as an income tax payment on the payee¡¯s Federal income tax return.

The consequences to a broker for failing to backup withhold and pay the amount withheld to the IRS are significant. First, a broker subject to backup withholding under section 3406 is liable under section 3403 for the payment of the backup withholding tax required to be withheld. Additionally, a broker who fails to withhold and pay backup withholding tax when required may be subject to civil penalties under sections 6651 for a failure to pay and 6656 for a failure to deposit unless the failure is due to reasonable cause and not due to willful neglect.

.04 TIN Matching Program

Section 31.3406(j)-1(a) provides that the Commissioner of Internal Revenue (Commissioner) has the authority to establish TIN matching programs (IRS TIN Matching Programs) and may prescribe by revenue procedure or other guidance the scope and terms and conditions for participating in such programs. Section 31.3406(j)-1(b) provides that none of the matching details received by a payor through an IRS TIN Matching Program will constitute an IRS notification regarding incorrect name and TIN combination for purposes of imposing backup withholding under section 3406(a)(1)(B). Section 31.3406(j)-1(d) provides that the IRS will not use a payor¡¯s decision not to participate in an IRS TIN Matching Program as a basis to assert that the payor lacks reasonable cause under section 6724(a) for failure to file a correct information return under section 6721 or to furnish a correct payee statement under section 6722.

Revenue Procedure 97-31, 1997-26 I.R.B. 6 (June 30, 1997), established procedures under which Federal agencies could submit payee names and TINs and the IRS would inform the agency whether the names and TINs matched the information in the IRS¡¯s database for the program. Revenue Procedure 2003-9, 2003-8 I.R.B. 516 (February 24, 2003), established an IRS TIN Matching Program that permits payors to verify name and TIN combinations provided by payees that are required to be reported on information returns and payee statements. To participate in this IRS TIN Matching Program, the payor must complete an application. Then, prior to filing an information return, the IRS TIN Matching Program participant may check the name and TIN combination furnished by the payee against the name and TIN combination contained in the IRS-maintained database. More information is available at /tax-professionals/taxpayer-identification-number-tin-matching. See Publication 2108A, On-Line Taxpayer Identification Number (TIN) Matching Program.

.05 Notice 2024-56

Notice 2024-56 provides transitional relief for brokers who are otherwise required to file information returns under section 6045 and backup withhold under section 3406 with respect to sales of digital assets effected by the brokers for their customers. In addition to penalty relief for certain brokers that fail to file Forms 1099-DA and furnish payee statements with respect to certain sales of digital assets, Notice 2024-56 provides temporary transitional relief from the obligation to backup withhold under section 3406 and pay such amounts to the IRS under section 3403 with respect to certain sales of digital assets. Specifically, section 3.01 of Notice 2024-56 provides that backup withholding will not be required on sales of digital assets effected by the broker on behalf of customers during calendar year 2025.

In addition, for digital asset sales effected by the broker before January 1, 2027, section 3.02 of Notice 2024-56 permits brokers to use alternative procedures to obtain TINs from customers that opened accounts with the broker prior to January 1, 2026 (preexisting customers) if the broker submits the payee¡¯s name and TIN combination to the IRS TIN Matching Program and receives a response that the name and TIN combination furnished by the payee matches the name and TIN combination for that payee in IRS records.

Additionally, for sales of digital assets in exchange for different digital assets effected on behalf of customers before January 1, 2027, section 3.06 of Notice 2024-56 limits the amount of backup withholding tax that brokers must withhold and pay as a tax to the IRS to the amount that the broker receives upon the immediate liquidation of 24 percent of the customer¡¯s received digital assets, notwithstanding that such amount may be less than the value of 24 percent of the customer¡¯s received digital assets determined at the time of the transaction giving rise to the backup withholding obligation.

Finally, section 3.06 of Notice 2024-56 also provides penalty relief from information reporting penalties and relief from penalties under sections 6651 and 6656 with respect to any decrease in the value of received digital assets between the time of the transaction giving rise to the backup withholding obligation and the time the broker liquidates 24 percent of a customer¡¯s received digital assets.

.06 Treatment of Certain Preexisting Customers as Exempt Foreign Persons

The relief provided in section 3.02 of Notice 2024-56 applies only to customers with certified TINs, which are generally U.S. persons. To provide additional time for brokers to collect the necessary documentation to treat preexisting customers as exempt foreign persons with respect to digital asset sales effected prior to January 1, 2027, section 1.6045-1(g)(4)(vi)(F) permits a broker to treat a customer with an account established prior to January 1, 2026, as an exempt foreign person if the customer has not been previously classified as a U.S. person by the broker and the information the broker has for the customer in its files includes a residence address that is not a U.S. address.

.01 Sales Effected in Calendar Year 2026

Digital asset brokers are in the process of building and implementing systems and procedures that will enable them to comply with the section 6045 information reporting obligations for digital asset sales set forth in the final regulations. These brokers are also building and implementing systems and procedures that will enable them to comply with associated backup withholding tax obligations for customers who do not supply certified TINs or otherwise do not provide documentation establishing they are exempt from backup withholding. The Treasury Department and the IRS understand that, notwithstanding the transitional relief provided in Notice 2024-56, digital asset brokers may need additional time to build and implement backup withholding systems prior to the application of the backup withholding rules for transactions on or after January 1, 2026, as required after the application of Notice 2024-56. Accordingly, the Treasury Department and the IRS are extending for one additional year the backup withholding relief provided by section 3.01 of Notice 2024-56 with respect to sales of digital assets. Therefore, backup withholding tax obligations under sections 3406 and 3403 will not be required on any digital asset sale effected by a broker during calendar year 2025 or calendar year 2026.

.02 TIN Collection for Sales Effected in Calendar Year 2027

The Treasury Department and the IRS are aware that some brokers may need additional time to obtain certified TINs from preexisting customers. Accordingly, the Treasury Department and the IRS are extending the relief provided by section 3.02 of Notice 2024-56 to permit brokers to rely on uncertified TINs of payees that are preexisting customers if the broker, prior to effecting the digital asset sale transaction for the customer, submits the payee¡¯s name and TIN combination to the IRS TIN Matching Program and receives a response that the submitted name and TIN combination matches the name and TIN combination for that payee in the IRS records. This alternative TIN collection relief is permitted for digital asset sales effected in calendar year 2027 on behalf of payees that are preexisting customers.

.03 Treatment of Certain Preexisting Customers as Exempt Foreign Persons for Sales Effected in Calendar Year 2027

The Treasury Department and the IRS are aware that some brokers may need additional time beyond that provided in section 1.6045-1(g)(4)(vi)(F) to obtain documentation necessary to treat customers with an account established prior to January 1, 2026, as exempt foreign persons. Accordingly, to provide this additional time, the IRS will not impose penalties under sections 6721 and 6722 on brokers that fail to file information returns and furnish payee statements with respect to sales of digital assets effected during calendar year 2027 for any customer with an account established prior to January 1, 2026, if the customer has not been previously classified as a U.S. person by the broker and the information the broker has in its files for the customer includes a residence address that is not a U.S. address. Additionally, backup withholding under section 3406 will not be required on any digital asset sale effected by brokers during calendar year 2027 for these customers. Finally, the IRS will not impose penalties on brokers that would otherwise be required to file Form 945 with respect to the backup withholding tax due with respect to digital asset sales effected during calendar year 2027 for these customers.

.04 Amount of Backup Withholding for Sales Effected in Calendar Year 2027

In the case of a sale of a digital asset for different digital assets other than specified nonfungible tokens (specified NFTs), as defined in section 1.6045-1(d)(10)(iv)(A) through (C), brokers may need additional time to implement new backup withholding procedures because the value of the digital assets received in such sales can change between the time of the transaction and the time the received digital assets are liquidated into U.S. dollars for depositing with the IRS. Accordingly, to provide brokers additional time to develop appropriate procedures, the Treasury Department and the IRS are extending the relief provided by section 3.06 of Notice 2024-56 to limit the amount that the broker must pay as backup withholding tax for reportable digital asset sales effected in calendar year 2027 to the amount that the broker receives upon the immediate liquidation of 24 percent of the customer¡¯s received digital assets, notwithstanding that such amount may be less than 24 percent of customer¡¯s received digital assets at the time of the transaction giving rise to the backup withholding obligation. This relief also includes the penalty relief from information reporting penalties and relief from penalties under sections 6651 and 6656 with respect to any decrease in the value of received digital assets between the time of the transaction giving rise to the backup withholding obligation and the time the broker liquidates 24 percent of a customer¡¯s received digital assets. Finally, the IRS will not impose penalties on brokers that are required to file Form 945 with respect to the backup withholding tax due as described in this section 3.04 with respect to digital asset sales, provided the broker pays and reports the amount of backup withholding tax that is withheld and deposited with the IRS in accordance with this section 3.04.

This notice is effective for digital asset sales effected on or after January 1, 2025.

Notice 2024-56 is modified.

The principal author of this notice is the Office of the Associate Chief Counsel (Procedure and Administration). For further information regarding this notice, please call (202) 317-5436 (not a toll-free number).

¹ Unless otherwise specified, all ¡°section¡± references are to sections of the Internal Revenue Code, the Income Tax Regulations (26 CFR part 1), or to the Employment Taxes and Collection of Income Tax at Source Regulations (26 CFR part 31).

This notice provides the applicable reference price for qualified natural gas production from qualified marginal wells during taxable years beginning in calendar year 2025 for the purpose of determining the marginal well production credit (MWC) under ¡ì 45I of the Internal Revenue Code. The applicable reference price for taxable years beginning in calendar year 2025 is $1.64 per 1,000 cubic feet (Mcf).

This notice also provides the credit amount used for the purpose of determining the MWC for taxable years beginning in calendar year 2025. The credit amount is determined using the 2025 inflation adjustment factor of 1.5821 and the applicable reference price of $1.64 per Mcf. The credit amount for taxable years beginning in calendar year 2025 is $0.79 per Mcf.

Section 45I(a), as it relates to qualified natural gas production, provides that, for purposes of ¡ì 38, the MWC for any taxable year is an amount equal to the product of (1) the credit amount and (2) the qualified natural gas production that is attributable to the taxpayer.

Section 45I(c)(1) provides that ¡°qualified natural gas production¡± means domestic natural gas produced from a qualified marginal well. Section 45I(c)(3)(A) provides that a qualified marginal well is a domestic well (i) the production from which during the taxable year is treated as marginal production under ¡ì 613A(c)(6), or (ii) which, during the taxable year (I) has average production of not more than 25 barrel-of-oil equivalents per day, and (II) produces water at a rate not less than 95 percent of total well effluent.

Section 613A(c)(6)(D) and (E) provide that ¡°marginal production¡± means domestic natural gas produced during any taxable year from a property which is a stripper well property for the calendar year in which the taxable year begins. A ¡°stripper well property¡± is, with respect to any calendar year, any property producing not more than 15 barrel equivalents per day, determined by dividing the average daily production of domestic crude oil and domestic natural gas from producing wells on the property for such calendar year by the number of such wells.

Section 45I(c)(2)(A) provides that generally only the first 1,095 barrels or barrel-of-oil equivalents (as defined in ¡ì 45K(d)(5)) produced during the taxable year qualify for the MWC. This limitation is proportionately reduced in the case of a short taxable year or in the case of a well that is not capable of production each day of a taxable year. See ¡ì 45I(c)(2)(B). The number of wells on which a taxpayer may claim the MWC is not limited.

Section 45I(d)(2) provides that to claim the credit a taxpayer must hold an operating interest in the qualified marginal well producing the natural gas to which the credit relates. Under ¡ì 45I(d)(1) if a well is owned by more than one owner and the natural gas production exceeds the limitation under ¡ì 45I(c)(2), the qualifying natural gas production attributable to the taxpayer is determined on the basis of the ratio which the taxpayer¡¯s revenue interest in the production bears to the aggregate of the revenue interests of all operating interest owners in the production. Finally, ¡ì 45I(d)(3) provides that the MWC is not allowable if the taxpayer is also eligible to claim the ¡ì 45K nonconventional sources credit for the taxable year, unless the taxpayer elects not to claim the credit under ¡ì 45K for the well.

For purposes of ¡ì 45I(a)(1), the credit amount is 50 cents (adjusted for inflation) per Mcf of qualified natural gas production (tentative credit amount). See ¡ì 45I(b)(1)(B) and (b)(2)(B).

Section 45I(b)(2)(A) and (B) provide that the tentative credit amount (adjusted for inflation) is reduced (but not below zero) to the extent that the applicable reference price exceeds $1.67 (adjusted for inflation). More specifically, ¡ì 45I(b)(2)(A) provides that the tentative credit amount (adjusted for inflation) is reduced by an amount which bears the same ratio to the tentative credit amount (adjusted for inflation) as the excess (if any) of the applicable reference price over $1.67 (adjusted for inflation), bears to $0.33 (adjusted for inflation). As a result, the MWC is not available if the applicable reference price for qualified natural gas production is $2.00 (adjusted for inflation) or more.

Section 45I(b)(2)(A) also provides that the applicable reference price for a taxable year is the reference price for the calendar year preceding the calendar year in which the taxable year begins. Section 45I(b)(2)(C)(ii) provides that the term ¡°reference price¡± means, with respect to any calendar year, in the case of qualified natural gas production, the Secretary¡¯s estimate of the annual average wellhead price per Mcf for all domestic natural gas.

Section 45I(b)(2)(B) provides that in the case of any taxable year beginning in a calendar year after 2005, each of the dollar amounts contained in ¡ì 45I(b)(2)(A) will be increased to an amount equal to such dollar amount multiplied by the inflation adjustment factor for such calendar year (determined under ¡ì 43(b)(3)(B) by substituting ¡°2004¡± for ¡°1990¡±).

.1 Inflation Adjustment. The inflation adjustment factor under ¡ì 45I(b)(2)(B) for calendar year 2025 is 1.5821.

.2 Reference Price. The Secretary¡¯s estimate of the calendar year 2024 annual average wellhead price per Mcf for all domestic natural gas under ¡ì 45I(b)(2)(C)(ii) was calculated by applying the Producer Price Index commodity index for ¡°Natural Gas from the Wellhead¡± (WPU053101051)¹ published by the Bureau of Labor Statistics (BLS) as part of its Producer Price Index program, to the 2023 annual average wellhead price ($2.04) published in Notice 2024-52, 2024-27 I.R.B. 2. The annual Producer Price Index commodity index for natural gas published by the BLS was 63.423 in 2023 and 50.869 in 2024, which implies a ratio of 2024 to 2023 average wellhead prices of 0.802 (50.869/63.423). Therefore, the Secretary¡¯s estimate of the calendar year 2024 annual average wellhead price per Mcf for all domestic natural gas is $1.64 per Mcf (0.802 ¡Á $2.04 per Mcf). The one cent difference is due to rounding.

For years after 2024, the Secretary intends to continue calculating the reference price by application of the Producer Price Index commodity index for ¡°Natural Gas from the Wellhead¡± (WPU053101051) published by the BLS to the previous year¡¯s reference price.

Under ¡ì 45I(b)(1)(B) and (2)(B), the tentative credit amount used to calculate the MWC for taxable years beginning in calendar year 2025 is $0.79 per Mcf ($0.50 ¡Á 1.5821 inflation adjustment factor).

Pursuant to ¡ì 45I(b)(2)(A), the tentative credit amount is reduced (but not below zero) by an amount (the Reduction Amount) which bears the same ratio to such amount as (i) the excess (if any) of the applicable reference price over $2.64 ($1.67 ¡Á 1.5821 inflation adjustment factor), bears to (ii) $0.52 ($0.33 ¡Á 1.5821 inflation adjustment factor). The Reduction Amount (as adjusted for inflation) is computed as follows:

The Reduction Amount is $ -1.52 (($1.64 - $2.64) ¡Â $0.52 ¡Á $0.79), which is less than zero, therefore, the tentative credit amount ($0.79) is not reduced.

This notice is effective for qualified natural gas production during taxable years beginning in calendar year 2025.

The principal authors of this notice are Boris Kukso and David Villagrana of the Office of Associate Chief Counsel (Energy, Credits, and Excise Tax). For further information regarding this notice contact Mr. Kukso or Mr. Villagrana at (202) 317-6853 (not a toll-free number).

¹ https://data.bls.gov/cgi-bin/srgate. The BLS publishes indexes and not actual or average prices.

This notice provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under ¡ì 417(e)(3), and the 24-month average segment rates under ¡ì 430(h)(2) of the Internal Revenue Code. In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under ¡ì 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under ¡ì 431(c)(6)(E)(ii)(I).