IRS Issues News Release Providing Guidance on Energy Tax Credits for Assistance from Prohibited Foreign Entity (PFE)

The IRS issued a news release providing guidance for determining eligibility for certain energy tax credits when there is material assistance from a prohibited foreign entity (PFE). The notice outlines how Treasury and IRS intend to propose regulations regarding the definition of a PFE and calculation of the material assistance cost ratio, while also providing interim safe harbors for taxpayers to use until forthcoming safe harbor tables are published. Taxpayers may rely on these rules for Section 45Y or 48E qualified facilities with construction beginning after Dec. 31, 2025, and for Section 45X eligible components sold in taxable years beginning ...