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This notice provides relief from penalties under section 6707A(a) and 6707(a) for participants in and material advisors to micro-captive reportable transactions for disclosure statements required to be filed with the Office of Tax Shelter Analysis (OTSA) under sections 6011 and 6111, as set forth in §§ 1.6011-10(h)(2) and (3) and 1.6011-11(h)(2) and (3), respectively. This relief applies only if the required disclosure statements are filed with OTSA by July 31, 2025.

This Revenue Procedure provides issuers of qualified mortgage bonds and mortgage credit certificates with (1) the nationwide average purchase price for residences located in the United States, and (2) the average area purchase price safe harbors for residences located in statistical areas in each state, the District of Columbia, Puerto Rico, the Northern Mariana Islands, American Samoa, the Virgin Islands, and Guam.

26 CFR 601.601: Rules and Regulations

(Also: Part 1, §§ 25, 143, 6a.103A-1(b)(4), 6a.103A-2(f)(5).)

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

This notice announces the applicable percentage under section 613A(c)(6)(C) for marginal oil and gas properties in the 2025 calendar year. The applicable percentage is used to determine the amount of the percentage depletion deduction allowable under section 613A(c)(6) with respect to oil and natural gas produced from marginal properties.

Notice 2025-23 informs taxpayers and material advisors that final regulations regarding the identification of certain partnership related-party basis adjustment transactions as transactions of interest will be withdrawn through the forthcoming publication of proposed and final regulations and that they can rely on the notice for relief from applicable penalties for failure to file disclosure statements. In addition, Notice 2025-23 revokes Notice 2024-54, which informed taxpayers of intended proposed regulations that would provide substantive technical rules to discourage basis shifting among related partners.

Federal rates; adjusted federal rates; adjusted federal long-term rate, and the long-term tax exempt rate. For purposes of sections 382, 1274, 1288, 7872 and other sections of the Code, tables set forth the rates for May 2025.

(Also, Sections 42, 280G, 382, 467, 468, 482, 483, 1288, 7520, 7872.)

This notice starts the process of eliminating extraneous and unnecessary Internal Revenue Bulletin (IRB) guidance by identifying and obsoleting nine IRB guidance documents.

This revenue ruling provides various prescribed rates for federal income tax purposes for May 2025 (the current month). Table 1 contains the short-term, mid-term, and long-term applicable federal rates (AFR) for the current month for purposes of section 1274(d) of the Internal Revenue Code. Table 2 contains the short-term, mid-term, and long-term adjusted applicable federal rates (adjusted AFR) for the current month for purposes of section 1288(b). Table 3 sets forth the adjusted federal long-term rate and the long-term tax-exempt rate described in section 382(f). Table 4 contains the appropriate percentages for determining the low-income housing credit described in section 42(b)(1) for buildings placed in service during the current month. ob体育ever, under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after July 30, 2008, shall not be less than 9%. Finally, Table 5 contains the federal rate for determining the present value of an annuity, an interest for life or for a term of years, or a remainder or a reversionary interest for purposes of section 7520.

The applicable federal short-term, mid-term, and long-term rates are set forth for the month of May 2025. See Rev. Rul. 2025-10, page 1421.

The applicable federal short-term, mid-term, and long-term rates are set forth for the month of May 2025. See Rev. Rul. 2025-10, page 1421.

The adjusted applicable federal long-term rate is set forth for the month of May 2025. See Rev. Rul. 2025-10, page 1421.

The applicable federal short-term, mid-term, and long-term rates are set forth for the month of May 2025. See Rev. Rul. 2025-10, page 1421.

The applicable federal short-term rates are set forth for the month of May 2025. See Rev. Rul. 2025-10, page 1421.

The applicable federal short-term, mid-term, and long-term rates are set forth for the month of May 2025. See Rev. Rul. 2025-10, page 1421.

The applicable federal short-term, mid-term, and long-term rates are set forth for the month of May 2025. See Rev. Rul. 2025-10, page 1421.

The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the month of May 2025. See Rev. Rul. 2025-10, page 1421.

The applicable federal mid-term rates are set forth for the month of May 2025. See Rev. Rul. 2025-10, page 1421.

The applicable federal short-term, mid-term, and long-term rates are set forth for the month of May 2025. See Rev. Rul. 2025-10, page 1421.

This notice announces the applicable percentage under § 613A of the Internal Revenue Code to be used in determining percentage depletion for marginal properties for the 2025 calendar year.

Section 613A(c)(6)(C) defines the term “applicable percentage” for purposes of determining percentage depletion for oil and gas produced from marginal properties. The applicable percentage is the percentage (not greater than 25 percent) equal to the sum of 15 percent, plus one percentage point for each whole dollar by which $20 exceeds the reference price (determined under § 45K(d)(2)(C)) for crude oil for the calendar year preceding the calendar year in which the taxable year begins. The reference price determined under § 45K(d)(2)(C) for the 2024 calendar year is $74.48. Accordingly, 15% is the applicable percentage under § 613A to be used in determining percentage depletion for marginal properties for the 2025 calendar year.

The following table contains the applicable percentages for marginal production for taxable years beginning in calendar years 1991 through 2025.

The principal author of this notice is Derek Gimbel of the Office of Associate Chief Counsel (Energy, Credits, and Excise Tax). For further information regarding this notice contact Derek Gimbel at 202-317-6853 (not a toll-free number).

This notice provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under § 417(e)(3), and the 24-month average segment rates under § 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 § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under § 431(c)(6)(E)(ii)(I).

This notice starts the process of eliminating extraneous and unnecessary Internal Revenue Bulletin (IRB) guidance by identifying and obsoleting nine IRB guidance documents.

This notice announces that the Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) intend to publish a notice of proposed rulemaking (forthcoming NPRM) proposing to remove § 1.6011-18¹ (Basis Shifting TOI Regulations) from the Income Tax Regulations (26 CFR part 1). This notice provides immediate relief from (i) penalties under § 6707A(a) to participants in transactions identified as transactions of interest in the Basis Shifting TOI Regulations that are required to file disclosure statements under § 6011, and (ii) penalties under §§ 6707(a) and 6708 for material advisors to transactions identified as transactions of interest in the Basis Shifting TOI Regulations that are required to file disclosure statements under § 6111 and maintain lists under § 6112. Lastly, this notice withdraws Notice 2024-54, 2024-28 I.R.B. 24 (Basis Shifting Notice), which describes certain proposed regulations that the Treasury Department and the IRS intended to issue addressing partnership related-party basis shifting transactions.

On February 19, 2025, the President issued Executive Order 14219, Ensuring Lawful Governance and Implementing the President’s “Department of Government Efficiency” Deregulatory Initiative (Executive Order 14219). Executive Order 14219 directs agencies to initiate a review process for the identification and removal of certain regulations and other guidance that meet any of the factors set forth in Executive Order 14219. Pursuant to the review directed by Executive Order 14219, the Treasury Department and the IRS have identified the Basis Shifting TOI Regulations for removal and the Basis Shifting Notice for withdrawal as described in this notice.

.01 Effective January 14, 2025, the Basis Shifting TOI Regulations identify certain partnership related-party basis adjustment transactions and substantially similar transactions as transactions of interest. Taxpayers and their material advisors have criticized the Basis Shifting TOI Regulations as imposing complex, burdensome, and retroactive disclosure obligations on many ordinary-course and tax-compliant business activities, creating costly compliance obligations and uncertainty for businesses.

.02 Pursuant to Executive Order 14219, the Treasury Department and the IRS have identified the Basis Shifting TOI Regulations as appropriate for removal and intend to publish the forthcoming NPRM proposing to remove the Basis Shifting TOI Regulations from 26 CFR part 1. The forthcoming NPRM, when finalized, will obviate the need for participants and material advisors to comply with all of the transaction of interest requirements they would otherwise be required to follow because of the Basis Shifting TOI Regulations.

.03 The forthcoming NPRM will have a proposed applicability date that corresponds with the date this notice is issued to the public. See § 7805(b)(1)(C).

.04 The forthcoming NPRM will propose that taxpayers and material advisors may choose to apply the final regulations retroactively to January 14, 2025, which is the applicability date of the Basis Shifting TOI Regulations. See § 7805(b)(7).

.05 Taxpayers and material advisors may rely on this notice until the forthcoming NPRM is finalized.

.01 Participant penalty waiver. Given the Treasury Department and the IRS’s intent to propose the removal of the Basis Shifting TOI Regulations, the IRS will, in the interest of sound tax administration, waive penalties under § 6707A(a) for any failure to file a Form 8886, Reportable Transaction Disclosure Statement, that is otherwise required because of the Basis Shifting TOI Regulations.

.02 Material advisor penalty waiver. Given the Treasury Department and the IRS’s intent to propose the removal of the Basis Shifting TOI Regulations, the IRS will, in the interest of sound tax administration, waive penalties under § 6707(a) for any failure to file a Form 8918, Material Advisor Disclosure Statement, and also will waive penalties under § 6708 for any failure to maintain a list under § 6112, that is otherwise required because of the Basis Shifting TOI Regulations.

The Basis Shifting Notice announced the Treasury Department and the IRS’s intention to publish certain proposed regulations addressing partnership related-party basis shifting transactions. Stakeholders have stated that the intended proposed regulations, if finalized, would impose complex, burdensome, and retroactive technical rules on many ordinary-course and tax-compliant business activities, creating costly compliance obligations and uncertainty for businesses. After the review directed by Executive Order 14219, the Basis Shifting Notice is hereby withdrawn.

Notice 2024-54 is withdrawn.

The principal authors of this notice are Anthony Sacco, Jeremy Milton, and Elizabeth Zanet of the Office of the Associate Chief Counsel (Passthroughs, Trusts, and Estates). For further information regarding this notice contact Mr. Sacco, Mr. Milton, or Ms. Zanet at (202) 317-5279 (not a toll-free number).

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

This notice provides relief from penalties under section 6707A(a) of the Internal Revenue Code (Code)¹ to participants in micro-captive reportable transactions that fail to file certain disclosure statements required under section 6011 and § 1.6011-10(h)(2) or § 1.6011-11(h)(2) by April 14, 2025. This relief applies only if such participants file the required disclosure statement with the Office of Tax Shelter Analysis (OTSA) by July 31, 2025. In addition, this notice provides relief from penalties under section 6707(a) for material advisors to certain micro-captive reportable transactions that are required under section 6111 and § 1.6011-10(h)(3) or § 1.6011-11(h)(3) to file a disclosure statement with OTSA by April 30, 2025, if such material advisors file the disclosure statement with OTSA by July 31, 2025. The relevant penalties will be waived as described in section 3 of this notice.

On January 14, 2025, the Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) published final regulations under section 6011 (§§ 1.6011-10 and 1.6011-11) in the Federal Register (TD 10029, 90 FR 3559, 90 FR 3562). Section 1.6011-10(a) identifies transactions that are the same as, or substantially similar to, certain micro-captive transactions as listed transactions, a type of reportable transaction (Micro-captive Listed Transaction). Section 1.6011-11(a) identifies transactions that are the same as, or substantially similar to, certain other micro-captive transactions as transactions of interest, another type of reportable transaction (Micro-captive Transaction of Interest). Material advisors and certain participants in these reportable transactions are required to file disclosure statements with the IRS and OTSA and are subject to penalties if they fail to timely make such disclosures. In describing the disclosure obligations for participants and material advisors, respectively, §§ 1.6011-10 and 1.6011-11 reference the provisions of § 1.6011-4(e), for participants, and § 301.6111-3, for material advisors.

Generally, § 1.6011-4(e)(1) provides that the disclosure statement for a reportable transaction must be attached to the taxpayer’s tax return for each taxable year for which a taxpayer participates in a reportable transaction. In addition, a disclosure statement for a reportable transaction must be attached to each amended return that reflects a taxpayer’s participation in a reportable transaction. A copy of the disclosure statement must be sent to OTSA at the same time that any disclosure statement is first filed by the taxpayer pertaining to a particular reportable transaction.

In addition, § 1.6011-4(e)(2)(i) provides that if a transaction becomes a listed transaction or a transaction of interest after the filing of a taxpayer’s tax return (including an amended return) reflecting the taxpayer’s participation in the transaction and before the end of the period of limitations for assessment of tax for any taxable year in which the taxpayer participated in the transaction, then a disclosure statement must be filed, regardless of whether the taxpayer participated in the transaction in the year the transaction became a listed transaction or a transaction of interest, with OTSA within 90 calendar days after the date on which the transaction became a listed transaction or a transaction of interest (Participant Later Identified Transaction rule). Participants required to disclose these transactions pursuant to section 6011 and § 1.6011-4 who fail to do so may be subject to a penalty under section 6707A(a).

Section 301.6111-3(e) provides that a material advisor’s disclosure statement for a reportable transaction must be filed with OTSA by the last day of the month that follows the end of the calendar quarter in which the advisor became a material advisor with respect to the reportable transaction or in which the circumstances necessitating an amended disclosure statement occur. Section 301.6111-3(b)(4)(iii) provides that if a transaction that was not a reportable transaction is identified as a listed transaction or a transaction of interest in published guidance after the occurrence of the events described in § 301.6111-3(b)(4)(i), the person will be treated as becoming a material advisor on the date the transaction is identified as a listed transaction or a transaction of interest (Material Advisor Later Identified Transaction rule). Material advisors required to disclose these transactions pursuant to section 6111 and § 301.6111-3 who fail to do so may be subject to a penalty under section 6707(a).

Sections 1.6011-10(a) and 1.6011-11(a) identified certain micro-captive transactions as Micro-captive Listed Transactions or Micro-captive Transactions of Interest effective as of January 14, 2025. Consequently, as described in §§ 1.6011-10(h)(2) and 1.6011-11(h)(2), participants in transactions identified in §§ 1.6011-10(a) and 1.6011-11(a) who filed returns reflecting their participation in such transactions and for which the period of limitations for assessment of tax had not ended on or before January 14, 2025, generally must file initial disclosure statements with OTSA by April 14, 2025, as required by the Participant Later Identified Transaction rule. The Participant Later Identified Transaction rule may not apply for taxpayers who have finalized a settlement agreement, as set forth in §§ 1.6011-10(h)(2) and 1.6011-11(h)(2). Further, the Participant Later Identified Transaction rule may not apply for participants in Micro-captive Transactions of Interest that filed disclosure statements pursuant to Notice 2016-66, 2016-47 I.R.B. 745, as set forth in § 1.6011-11(h)(2). As described in §§ 1.6011-10(h)(3) and 1.6011-11(h)(3), material advisors to transactions identified in §§ 1.6011-10(a) and 1.6011-11(a) who made a tax statement on or after January 14, 2019, must file the required disclosure with OTSA by April 30, 2025, as required by the Material Advisor Later Identified Transaction rule. Transactions for which the Participant Later Identified Transaction rule or Material Advisor Later Identified Transaction rule apply are referred to as “Later Identified Micro-captive Listed Transactions” and “Later Identified Micro-captive Transactions of Interest.”

Stakeholders have raised concerns regarding the ability of micro-captive reportable transaction participants to timely comply with their initial filing obligations with respect to Later Identified Micro-captive Listed Transactions and Later Identified Micro-captive Transactions of Interest. As further described in section 3 of this notice, the Treasury Department and the IRS are providing a limited waiver of penalties under sections 6707A(a) and 6707(a).

.01 Participant penalty waiver. In light of potential challenges associated with preparing disclosure statements during tax return filing season and in the interest of sound tax administration, the IRS will waive penalties under section 6707A(a) with respect to Later Identified Micro-captive Listed Transaction and Later Identified Micro-captive Transaction of Interest disclosure statements completed in accordance with § 1.6011-4(d) and the Instructions to Form 8886, Reportable Transaction Disclosure Statement, if the participant files the required disclosure statement with OTSA by July 31, 2025.

This relief is limited to Later Identified Micro-captive Listed Transactions and Later Identified Micro-captive Transactions of Interest. This notice does not provide relief from penalties under section 6707A(a) for participants required to file a copy of their disclosure statements with OTSA at the same time the participant first files a disclosure statement by attaching it to the participant’s tax return pursuant to § 1.6011-4(e)(1). Taxpayers concerned about meeting the due date for such disclosure statements can request an extension of the due date for their tax return to obtain additional time to file such disclosure statements. Disclosures required from participants with respect to Micro-captive Listed Transactions and Micro-captive Transactions of Interest on or after July 31, 2025, remain due as otherwise set forth in § 1.6011-4(e).

.02 Material advisor penalty waiver. In light of potential challenges associated with preparing disclosure statements during tax return filing season and in the interest of sound tax administration, the IRS will waive penalties under section 6707(a) with respect to Later Identified Micro-captive Listed Transaction and Later Identified Micro-captive Transaction of Interest disclosure statements completed in accordance with § 301.6111-3(d) and the instructions to Form 8918, Material Advisor Disclosure Statement, if the material advisor files the required disclosure statement with OTSA by July 31, 2025.

Disclosures required from material advisors with respect to Micro-captive Listed Transactions and Micro-captive Transactions of Interest on or after July 31, 2025, remain due as otherwise set forth in § 301.6111-3(e). This notice does not modify any list maintenance and furnishment obligations of material advisors as set forth in section 6112 and § 301.6112-1.

The principal author of this notice is Allan H. Sakaue of the Office of Associate Chief Counsel (Financial Institutions & Products). For further information regarding this notice contact Mr. Sakaue at (202) 317-6995 (not a toll-free number).

¹ Unless otherwise specified, all “section” or “§” references are to sections of the Code, the Income Tax Regulations (26 CFR part 1), or the Procedure and Administration Regulations (26 CFR part 301).

This revenue procedure provides issuers of qualified mortgage bonds, as defined in § 143(a) of the Internal Revenue Code¹, and issuers of mortgage credit certificates, as defined in § 25(c), with (1) the nationwide average purchase price for residences located in the United States, and (2) average area purchase price safe harbors for residences located in statistical areas in each state, the District of Columbia, Puerto Rico, the Northern Mariana Islands, American Samoa, the Virgin Islands, and Guam.

.01 Section 103(a) provides that, except as provided in § 103(b), gross income does not include interest on any State or local bond. Section 103(b)(1) provides that § 103(a) shall not apply to any private activity bond that is not a “qualified bond” within the meaning of § 141. Section 141(e) provides, in part, that the term “qualified bond” means any private activity bond if such bond (1) is a qualified mortgage bond under § 143, (2) meets the volume cap requirements under § 146, and (3) meets the applicable requirements under § 147.

.02 Section 143(a)(1) provides that the term “qualified mortgage bond” means a bond that is issued as part of a qualified mortgage issue. Section 143(a)(2)(A) provides that the term “qualified mortgage issue” means an issue of one or more bonds by a State or political subdivision thereof, but only if: (i) all proceeds of the issue (exclusive of issuance costs and a reasonably required reserve) are to be used to finance owner-occupied residences; (ii) the issue meets the requirements of subsections (c), (d), (e), (f), (g), (h), (i), and (m)(7) of § 143; (iii) the issue does not meet the private business tests of paragraphs (1) and (2) of § 141(b); and (iv) with respect to amounts received more than 10 years after the date of issuance, repayments of $250,000 or more of principal on mortgage financing provided by the issue are used by the close of the first semiannual period beginning after the date the prepayment (or complete repayment) is received to redeem bonds that are part of the issue.

.01 Average area purchase prices for single-family and two to four-family residences in MSAs, and for certain counties and county equivalents are set forth below. The safe harbor for “ALL OTHER AREAS” (found at the end of the table below) may be used for a statistical area that is not listed below.

.02 The nationwide average purchase price (for use in the housing cost/income ratio for new and existing residences) is $540,700.

Rev. Proc. 2024-21 is obsolete except as provided in section 6 of this revenue procedure.

.01 Issuers may rely on this revenue procedure to determine average area purchase price safe harbors for commitments to provide financing or issue mortgage credit certificates that are made, or (if the purchase precedes the commitment) for residences that are purchased, in the period that begins on April 16, 2025, and ends on the date as of which the safe harbors contained in section 4.01 of this revenue procedure are rendered obsolete by a new revenue procedure.

.02 Notwithstanding section 5 of this revenue procedure, issuers may continue to rely on the average area purchase price safe harbors contained in Rev. Proc. 2024-21, with respect to bonds sold, or for mortgage credit certificates issued with respect to bond authority exchanged, before May 16, 2025, if the commitments to provide financing or issue mortgage credit certificates are made on or before June 15, 2025.

.03 Except as provided in section 6.04 of this revenue procedure, issuers must use the nationwide average purchase price limitation contained in this revenue procedure for commitments to provide financing or issue mortgage credit certificates that are made, or (if the purchase precedes the commitment) for residences that are purchased, in the period that begins on April 16, 2025, and ends on the date when the nationwide average purchase price limitation is rendered obsolete by a new revenue procedure.

.04 Notwithstanding sections 5 and 6.03 of this revenue procedure, issuers may continue to rely on the nationwide average purchase price set forth in Rev. Proc. 2024-21 with respect to bonds sold, or for mortgage credit certificates issued with respect to bond authority exchanged, before May 16, 2025, if the commitments to provide financing or issue mortgage credit certificates are made on or before June 15, 2025.

In Section 7 of Rev. Proc. 2024-21, the Treasury Department and the Internal Revenue Service (IRS) requested comments for alternate data sources to calculate average area purchase prices. The Treasury Department and the IRS have reviewed all received comments and have determined that no changes to the data or the methodology for calculating average area purchase prices will be made.

The collection of information contained in this revenue procedure has been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act (44 U.S.C. 3507) under control number 1545-1877.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number.

Section 3.03 of this revenue procedure contains a collection of information requirement. The purpose of the collection of information is to verify the applicable FHA loan limit that issuers of qualified mortgage bonds and qualified mortgage certificates have used to calculate the average area purchase price for a given MSA for purposes of §§ 143(e) and 25(c). The collection of information is required to obtain the benefit of using revisions to FHA loan limits to determine average area purchase prices. The likely respondents are state and local governments.

The estimated total annual reporting and/or recordkeeping burden is: 15 hours.

The estimated annual burden per respondent and/or recordkeeper: 15 minutes.

The estimated number of respondents and/or recordkeepers: 60.

Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.

The principal authors of this revenue procedure are Zoran Stojanovic and Elena Hildebrandt of the Office of Associate Chief Counsel (Financial Institutions & Products). For further information regarding this revenue procedure contact Ms. Hildebrandt at (202) 317-4565 (not a toll-free number).

¹ Unless otherwise specified, all “section” or “§” references are to sections of the Internal Revenue Code or the Temporary Regulations under Title II of the Omnibus Reconciliation Act of 1980 (26 CFR part 6a).