Notice 2008-35

tax, disclosure, filing or payment obligations under § 4965, § 6033(a)(2), § 6011,
and § 6071. Some taxable entities may
be subject to disclosure obligations under § 6011(g), that apply to “prohibited
tax shelter transactions” as defined by
§ 4965(e) (including listed transactions).
The Service and Treasury recognize
that some taxpayers may have filed tax
returns taking the position that they were
entitled to the purported tax benefits of
the type of transaction described in this
notice. These taxpayers should take appropriate corrective action and ensure that
their transactions are disclosed properly.
DRAFTING INFORMATION
The principal author of this notice is
Eric Ingala of the Office of Associate Chief
Counsel (Passthroughs and Special Industries). For further information regarding
this notice, contact Mr. Ingala at (202)
622–3070 (not a toll-free call).

Amplification of Notice
2006–27 Certification of
Energy Efficient Home Credit
Notice 2008–35
SECTION 1. PURPOSE
This notice clarifies and supersedes Notice 2006–27, 2006–1 C.B. 626, as updated
by Announcement 2006–88, 2006–2 C.B.
910. Notice 2006–27, as updated, provided guidance regarding the calculation
of heating and cooling energy consumption for purposes of determining the eligibility of a dwelling unit (other than a manufactured home) for the New Energy Efficient Home Credit under Internal Revenue
Code § 45L. Notice 2006–27 also provided
guidance relating to the public list of software programs that may be used to calculate energy consumption. Guidance relating to manufactured homes is provided in
Notice 2008–36.
This notice supersedes Notice 2006–27
by substantially republishing the guidance
contained in that publication. This notice
clarifies the meaning of the terms equivalent rating network and eligible contractor,
and permits calculation procedures other
than those identified in Notice 2006–27 to
be used to calculate energy consumption.

March 24, 2008

Finally, this notice clarifies the process
for removing software from the list of approved software and reflects the extension
of the tax credit through December 31,
2008.
SECTION 2. BACKGROUND
.01 In General. Section 45L provides
a credit to an eligible contractor who constructs a qualified energy efficient home.
For qualified energy efficient homes (other
than manufactured homes), the amount of
the credit is $2,000. A dwelling unit qualifies for the credit if—
(1) It is located in the United States;
(2) Its construction is substantially
completed after August 8, 2005;
(3) It meets the energy saving requirements of § 45L(c)(1); and
(4) It is acquired from the eligible contractor after December 31, 2005, and before January 1, 2009, for use as a residence.
.02 Energy Saving Requirements. To
meet the energy saving requirements of
§ 45L(c)(1), a dwelling unit must be certified to provide a level of heating and cooling energy consumption that is at least 50
percent below that of a reference dwelling
unit constructed in accordance with the
standards of § 404 of the 2004 Supplement
to the 2003 International Energy Conservation Code (2004 IECC Supplement),
and to have building envelope component
improvements that provide for a level of
heating and cooling energy consumption
that is at least 10 percent below that of a
reference dwelling unit.
.03 Calculation Procedures. For purposes of section 2.02 of this notice, heating and cooling energy consumption must
be calculated in accordance with the procedures prescribed in Residential Energy
Services Network (RESNET) Publication
No. 05–001 (Nov. 17, 2005) or No.
06–001 (June 1, 2006) or in accordance
with an equivalent calculation procedure.
.04 Acquired from Eligible Contractor.
A qualified energy efficient home is acquired from an eligible contractor for use
as a residence if the person that constructed
the home sells or leases the home to another person for use as a residence. A qualified energy efficient home is not acquired
from an eligible contractor if the person
that constructed the home retains the home
for use as a residence. For example, a

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qualified energy efficient home is acquired
from an eligible contractor in the following
situations:
(1) A person constructs a qualified energy efficient home and then sells the home
to the homeowner.
(2) A person constructs a qualified energy efficient home and then leases the
home to the lessee or tenant.
(3) A person hires a third party contractor to construct a qualified energy efficient
home and then sells the home to the homeowner. (See section 4.01(5) of this notice
for guidance regarding the person treated
as the eligible contractor in this case.)
SECTION 3. CERTIFICATION
An eligible contractor must obtain the
certification required under § 45L(c)(1)
with respect to a dwelling unit (other than
a manufactured home) from an eligible
certifier before claiming the energy efficient home credit with respect to the
dwelling unit. An eligible contractor is
not required to file the certification with
the return on which the credit is claimed.
However, § 1.6001–1(a) of the Income
Tax Regulations requires that taxpayers
maintain such books and records as are
sufficient to establish the entitlement to,
and amount of, any credit claimed by the
taxpayer. Accordingly, an eligible contractor claiming a $2,000 credit under
§ 45L should retain the certification as
part of the eligible contractor’s records to
satisfy this requirement. The certification
will be treated as satisfying the requirements of § 45L(c)(1) if all construction
has been performed in a manner consistent
with the design specifications provided to
the eligible certifier and the certification
contains all of the following:
.01 The name, address, and telephone
number of the eligible certifier.
.02 The address of the dwelling unit.
.03 A statement by the eligible certifier
that—
(1) The dwelling unit has a projected
level of annual heating and cooling energy consumption that is at least 50 percent below the annual level of heating and
cooling energy consumption of a reference
dwelling unit in the same climate zone;
(2) Building envelope component improvements alone account for a level of annual heating and cooling energy consumption that is at least 10 percent below the

2008–12 I.R.B.

annual level of heating and cooling energy
consumption of a reference dwelling unit
in the same climate zone; and
(3) Heating and cooling energy consumption have been calculated in the manner prescribed in section 2.03 of this notice.
.04 A statement by the eligible certifier that field inspections of the dwelling
unit (or of other dwelling units under the
sampling protocol described below) performed by the eligible certifier during
and after the completion of construction
have confirmed that all features of the
home affecting such heating and cooling energy consumption comply with the
design specifications provided to the eligible certifier. With respect to builders
who build at least 85 homes during a
twelve-month period or build subdivisions with the same floor plan using the
same subcontractors, the eligible certifier
may use the sampling protocol found in
the current ENERGY STAR® for Homes
Sampling Protocol Guidelines instead of
inspecting all of the homes. The sampling
protocols can be found at the following
web address: http://www.energystar.gov/
index.cfm?c=bldrs_lenders_raters.nh_
sampling.
.05 A list identifying—
(1) The dwelling unit’s energy efficient
building envelope components and their
respective energy performance ratings as
required by § 401.3 of the 2004 IECC Supplement; and
(2) The energy efficient heating
and cooling equipment installed in the
dwelling unit and the energy efficiency
performance of such equipment as rated
under applicable Department of Energy
Appliance Standards test procedures.
.06 Identification of the listed software
program used to calculate energy consumption (see section 5 of this notice).
.07 A declaration, applicable to the
certification and any accompanying documents, signed by a person currently
authorized to bind the eligible certifier in
these matters, in the following form:
“Under penalties of perjury, I declare
that I have examined this certification,
including accompanying documents,
and to the best of my knowledge and
belief, the facts presented in support of
this certification are true, correct, and
complete.”

2008–12 I.R.B.

SECTION 4. DEFINITIONS
.01 The following definitions apply for
purposes of this notice:
(1) Building envelope components are
basement walls, exterior walls, floor, roof,
and any other building element that encloses conditioned space, including any
boundary between conditioned space and
unconditioned space.
(2) A climate zone is a geographical
area within which all locations have similar long-term climate conditions as defined
in Chapter 3 of the 2004 IECC Supplement.
(3) A dwelling unit is a single unit providing complete independent living facilities for one or more persons, including
permanent provisions for living, sleeping,
eating, cooking, and sanitation, within a
building that is not more than three stories
above grade in height.
(4) An eligible certifier is a person
that is not related (within the meaning of
§ 45(e)(4)) to the eligible contractor and
has been accredited or otherwise authorized by RESNET (or an equivalent rating
network) to use energy performance measurement methods approved by RESNET
(or the equivalent rating network). An employee or other representative of a utility
or local building regulatory authority qualifies as an eligible certifier if the employee
or representative has been accredited or
otherwise authorized by RESNET (or an
equivalent rating network) to use the approved energy performance measurement
methods.
(5) An eligible contractor is the person
that constructed a qualified energy efficient home. A person must own and have a
basis in the qualified energy efficient home
during its construction to qualify as an eligible contractor with respect to the home.
For example, in the situation described in
section 2.04(3) of this notice, if the person
that hires the third party contractor to construct the home owns and has the basis in
the home during its construction, the person that hires the third party contractor is
the eligible contractor and the third party
contractor is not an eligible contractor.
(6) An equivalent calculation procedure
is a procedure that produces results comparable to the results obtained under the
procedures prescribed in Residential Energy Services Network (RESNET) Publi-

648

cation No. 05–001 (Nov. 17, 2005) or
No. 06–001 (June 1, 2006).
(7) An equivalent rating network includes, in a state that has established energy efficiency standards under which a
dwelling unit is required to achieve a specified aggregate level of heating and cooling energy consumption for any purpose
(including compliance with building codes
or eligibility for a state grant or tax credit),
the state agency administering those standards. Thus, if the agency has accredited
or otherwise authorized a person to use
energy performance measurement methods approved by the agency for use in determining whether the state’s energy efficiency standards are satisfied, the person
so accredited or authorized qualifies as an
eligible certifier.
(8) A manufactured home is a dwelling
unit constructed in accordance with the
Federal Manufactured Home Construction
and Safety Standards (24 C.F.R. 3280).
(9) A qualified energy efficient home is
a dwelling unit that qualifies for the credit
under § 45L. See section 2.01 of this notice
for the requirements that a dwelling unit
must satisfy to qualify for the credit.
(10) A reference dwelling unit is a
dwelling unit that is similar in technical
specifications and design to the dwelling
unit constructed by the eligible contractor
except that—
(a) The reference dwelling unit is constructed in accordance with the minimum
standards of Chapter 4 of the 2004 IECC
Supplement;
(b) The reference dwelling unit’s air
conditioners have a Seasonal Energy Efficiency Ratio (SEER) of 13, measured in
accordance with 10 C.F.R. 430.23(m); and
(c) The reference dwelling unit’s heat
pumps have a SEER of 13 and a Heating Seasonal Performance Factor (HSPF)
of 7.7, measured in accordance with
10 C.F.R. 430.23(m).
SECTION 5. SOFTWARE
PROGRAMS
.01 In General. The Internal Revenue
Service will create and maintain a public list of software programs that may
be used to calculate energy consumption
for purposes of providing a certification under section 3 of this notice. This
list of approved software may be found

March 24, 2008

at: http://www.irs.gov/businesses/small/
industries/article/0,,id=155445,00.html.
.02 Requirements for Software Programs To Be Included on the Internal
Revenue Service List. A software program
will be included on the list created by the
Internal Revenue Service if the software
developer submits the following information to the Service and RESNET:
(1) The name, address, and telephone
number of the software developer,
(2) The name or other identifier of the
program as it will appear on the list,
(3) The test results, test runs, and the
software program with which the test was
conducted, and
(4) A declaration by the developer of
the software program, made under penalties of perjury, that the software program—
(i) Has satisfied all tests required to
conform to the software accreditation
process prescribed in Residential Energy
Services Network (RESNET) Publication No. 05–001 (Nov. 17, 2005) or
No. 06–001 (June 1, 2006); or
(ii) Has satisfied all tests necessary to
permit a determination that the software
program is sufficiently accurate to justify
its use in calculating energy consumption
for purposes of providing a certification
under section 3 of this notice.
.03 Addresses. Submissions under this
section must be addressed as follows:
Submissions to the Service submitted
by U.S. mail:
Internal Revenue Service
Attn: Program Administrator
CC:PSI:6, Room 5114
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044
Submissions to the Service submitted
by a private delivery service:
Internal Revenue Service
Attn: Program Administrator
CC:PSI:6, Room 5114
1111 Constitution Ave., N.W.
Washington, DC 20224
Submissions to RESNET:
Residential Energy Services Network
P.O. Box 4561
Oceanside, CA 92052–4561

March 24, 2008

.04 Original and Updated Lists. A software program was included on the original list if the software developer’s submission was received before March 1, 2006.
The list will be updated as necessary to reflect additions resulting from submissions
received after February 28, 2006, and deletions resulting from removal of software
from the list under section 5.05 of this notice.
.05 Removal from Published List. The
Service may, upon examination (and after
appropriate consultation with the Department of Energy), determine that a software
program is not sufficiently accurate to justify its use in calculating energy consumption for purposes of providing a certification under section 3 of this notice and remove the software program from the published list. The Service may undertake an
examination on its own initiative or in response to a public request supported by
appropriate analysis of the software program’s deficiencies.
.06 Effect of Removal from Published
List. A software program may not be used
to calculate energy consumption for purposes of providing a certification that satisfies the requirements of § 45L after the
effective date of removal of the software
from the published list. The removal will
not affect the validity of any certification
provided with respect to a dwelling unit
on or before the effective date of removal
from the published list. Generally, notice
that software is being removed from the
published list will be provided at the site
specified in section 5.01 of this notice at
least sixty (60) days before the effective
date of the removal.
.07 Public Availability of Information.
RESNET may make available for public
review any information provided to it under section 5.02 of this notice.
SECTION 6. PAPERWORK
REDUCTION ACT
The collections of information contained in this notice have 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 1545–1995.
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless the

649

collection of information displays a valid
OMB control number.
The collections of information in this
notice are in sections 3 and 5. This information is required to be collected and
retained in order to ensure that a dwelling
unit (other than a manufactured home)
meets the requirements for the energy
efficient home credit under § 45L. This
information will be used to determine
whether property for which certifications
are provided is property that qualifies for
the credit. The collection of information is
required to obtain a benefit. The likely respondents are corporations, partnerships,
and individuals.
The estimated total annual reporting
burden is 180 hours.
The estimated annual burden per respondent varies from 2.5 hours to 4 hours,
depending on individual circumstances,
with an estimated average burden of 3
hours to complete the certification required under this notice. The estimated
number of respondents is 45.
The estimated annual frequency of responses is on occasion.
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.
SECTION 7. EFFECT ON OTHER
DOCUMENTS
Notice 2006–27, as updated by Announcement 2006–88, is clarified and
superseded. Announcement 2006–88 is
also clarified and superseded.
SECTION 8. EFFECTIVE DATE
This notice applies with respect to certifications provided after February 29, 2008.
Taxpayers may apply the provisions of this
notice with respect to certifications provided on or before February 29, 2008.
SECTION 9. DRAFTING
INFORMATION
The principal author of this notice
is Jennifer Bernardini of the Office of
Associate Chief Counsel (Passthroughs
& Special Industries). For further information regarding this notice, contact

2008–12 I.R.B.

Jennifer Bernardini at (202) 622–3110
(not a toll-free call).

Amplification of Notice
2006–28 Energy Efficient
Home Credit; Manufactured
Homes
Notice 2008–36
SECTION 1. PURPOSE
This notice clarifies and supersedes Notice 2006–28, 2006–1 C.B. 628, as updated
by Announcement 2006–88, 2006–2 C.B.
910. Notice 2006–28, as updated, provided guidance regarding the calculation
of heating and cooling energy consumption for purposes of determining the eligibility of a manufactured home for the
New Energy Efficient Home Credit under Internal Revenue Code § 45L. Notice 2006–28 also provided guidance relating to the public list of software programs
that may be used to calculate energy consumption. Guidance relating to dwelling
units other than manufactured homes is
provided in Notice 2008–35.
This notice supersedes Notice 2006–28
by substantially republishing the guidance
contained in that publication. This notice
clarifies the meaning of the terms equivalent rating network and eligible contractor,
and permits calculation procedures other
than those identified in Notice 2006–28 to
be used to calculate energy consumption.
Finally, this notice clarifies the process
for removing software from the list of approved software and reflects the extension
of the tax credit through December 31,
2008.
SECTION 2. BACKGROUND
.01 In General. Section 45L provides
a credit to an eligible contractor who constructs a qualified energy efficient home.
For qualified energy efficient homes that
are manufactured homes, the amount of the
credit is $1,000 or $2,000, depending on
the energy savings that are achieved. A
manufactured home qualifies for the credit
if:
(1) It is located in the United States;
(2) Its construction is substantially
completed after August 8, 2005;

2008–12 I.R.B.

(3) It meets the energy saving requirements of § 45L(c)(2) or (3); and
(4) It is acquired, directly or indirectly,
from the eligible contractor after December 31, 2005, and before January 1, 2009,
for use as a residence.
.02 Energy Saving Requirements. To
meet the energy saving requirements of
§ 45L(c)(2) or (3), a manufactured home
must meet one of the following standards:
(1) To meet the energy saving requirements of § 45L(c)(2) and qualify for the
$2,000 credit, a manufactured home must
be certified to provide a level of heating
and cooling energy consumption that is at
least 50 percent below that of a reference
dwelling unit constructed in accordance
with the standards of § 404 of the 2004
Supplement to the 2003 International Energy Conservation Code (2004 IECC Supplement), and to have building envelope
component improvements that provide for
a level of heating and cooling energy consumption that is at least 10 percent below
that of a reference dwelling unit (see section 3 of this notice).
(2) To meet the energy saving requirements of § 45L(c)(3) and qualify for the
$1,000 credit, a manufactured home must
either—
(a) be certified to provide a level of
heating and cooling energy consumption
that is at least 30 percent below that of
a reference dwelling unit constructed in
accordance with the standards of § 404 of
the 2004 IECC Supplement, and to have
building envelope component improvements that provide for a level of heating
and cooling energy consumption that is at
least 10 percent below that of a reference
dwelling unit; or
(b) meet the current requirements established by the Administrator of the Environmental Protection Agency under the ENERGY STAR® Labeled Homes Program
in effect on the date construction is substantially completed (see section 4 of this
notice).
.03 Calculation Procedures. For purposes of section 2.02 of this notice, heating and cooling energy consumption must
be calculated in accordance with the procedures prescribed in Residential Energy
Services Network (RESNET) Publication
No. 05–001 (Nov. 17, 2005) or No.
06–001 (June 1, 2006) or in accordance
with an equivalent calculation procedure.

650

.04 Acquired from Eligible Contractor.
A qualified energy efficient manufactured
home is acquired directly from an eligible
contractor for use as a residence if the person that produced the manufactured home
sells or leases the manufactured home to
another person for use as a residence. A
qualified energy efficient manufactured
home is acquired indirectly from an eligible contractor for use as a residence if
the person that produced the manufactured
home sells the manufactured home to an
intermediary and the intermediary (or the
last of multiple intermediaries) sells or
leases the manufactured home to another
person for use as a residence. A qualified
energy efficient manufactured home is not
acquired from an eligible contractor if the
person that produced the manufactured
home retains the manufactured home for
use as a residence. For example, a qualified energy efficient manufactured home
is acquired from an eligible contractor in
the following situations:
(1) A person produces a qualified energy efficient manufactured home and then
sells the manufactured home to the homeowner.
(2) A person produces a qualified energy efficient manufactured home and then
leases the manufactured home to the lessee
or tenant.
(3) A person hires a third party contractor to produce a qualified energy efficient manufactured home and then sells
the manufactured home to the homeowner.
(See section 5.01(5) of this notice for guidance regarding the person treated as the eligible contractor in this case.)
(4) A person that produces a manufactured home sells the home to a dealer of
manufactured homes and the dealer sells
the manufactured home to another person
for use as a residence. (See section 7.01 of
this notice for a rule permitting an eligible
contractor to rely on a dealer’s statement
concerning a sale by the dealer.)
SECTION 3. REQUIREMENTS TO
CLAIM THE $2,000 CREDIT
An eligible contractor must obtain the
certification required under § 45L(c)(2)
with respect to a manufactured home from
an eligible certifier before claiming the
$2,000 energy efficient home credit with
respect to the manufactured home. An eligible contractor is not required to file the

March 24, 2008