The proposed regulations provide guidance on the resolution of federal tax controversies by the IRS Independent Office of Appeals (Appeals) under the Taxpayer First Act of 2019. Consideration of a federal tax controversy by Appeals is generally available to all taxpayers. The proposed regulations provide clarification of issues that do not meet the definition of a federal tax controversy, exceptions to consideration by Appeals, and procedural and timing requirements that must be met before Appeals will consider an issue. The proposed regulations also provide requirements a taxpayer that received a notice of deficiency must meet to receive the notice described in section 7803(e)(5) when the taxpayer requests consideration by Appeals and the request is denied.

The notice publishes the inflation adjustment factor for the carbon oxide sequestration credit under § 45Q for calendar year 2022. Also, the notice informs taxpayers that pursuant to § 45Q(g), as amended by the IRA, 2022 will be the final calendar year for which a taxpayer may claim a § 45Q credit under § 45Q(a)(1) and (2) for qualified carbon oxide that is captured by carbon capture equipment originally placed in service at a qualified facility before the date of enactment of the Bipartisan Budget Act of 2018.