AICPA provides recommendations on domestic content bonus credit

AICPA has provided recommendations to the Department of the Treasury and the IRS on interim guidance in Notice 2023-38 as updated by Notice 2024-41. The guidance describes certain rules that Treasury and the IRS intend to include in proposed regulations regarding the domestic content bonus credit (DCBC) requirements and related recordkeeping and certification requirements. AICPA’s recommendations include two approaches to provide a better calculation related to the Adjusted Percentage Rule, a safe harbor for classifications of certain applicable project components, clarification on retrofitted projects, and certification requirements. AICPA suggests allowing taxpayers to provide support for the domestic direct costs incurred to produce a manufactured product in the U.S. and including those amounts in the numerator regardless of whether there is a non-domestic manufactured product component. They also propose assuming that the direct costs attributable to producing a manufactured product are incurred proportionately to the components’ costs.