These interim final regulations are not subject to review under section 6(b) of Executive Order 12866 pursuant to the Memorandum of Agreement (July 4, 2025) between the Treasury Department and OMB regarding review of tax regulations.

Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6), it is hereby certified that these interim final regulations will not have a significant economic impact on a substantial number of small entities. The EA SEE user fee primarily affects individuals who take the EA SEE. Only individuals, not businesses, can be enrolled agents. Thus, the economic impact of these regulations on any small entity would be a result of an individual enrolled agent owning a small entity or a small entity employing an enrolled agent who must take the EA SEE. The Treasury Department and the IRS estimate that an average of 28,898 EA SEE examination parts will be taken by individuals annually. Therefore, a substantial number of small entities is not likely to be affected. Additionally, the economic impact on those entities is not significant. These regulations will establish a $66 fee per examination part (plus $251 payable directly to the third-party contractor), and will not have a significant economic impact on a small entity. Accordingly, the rule is not expected to have a significant economic impact on a substantial number of small entities, and a regulatory flexibility analysis is not required.

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) requires that agencies assess anticipated costs and benefits and take certain other actions before issuing a final rule that includes any Federal mandate that may result in expenditures in any one year by a State, local, or Tribal government, in the aggregate, or by the private sector, of $100 million in 1995 dollars, updated annually for inflation. This rule does not include any Federal mandate that may result in expenditures by State, local, or Tribal governments, or by the private sector in excess of that threshold.

Executive Order 13132 (Federalism) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial, direct compliance costs on State and local governments, and is not required by statute, or preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive order. These interim final regulations do not have federalism implications and do not impose substantial direct compliance costs on State and local governments or preempt State law within the meaning of the Executive order.

The annual EA SEE testing period for May 2026-February 2027 will begin shortly. It would be unnecessary and contrary to the public interest for the IRS to continue to charge the current, higher user fee pending public comment after the IRS has determined pursuant to the biennial review conducted under OMB Circular A-25 that the EA SEE user fee should be reduced going forward. To enable the reduced fee amount to be in effect for the upcoming EA SEE test period beginning in May 2026, the Treasury Department and the IRS find that there is good cause to dispense with (1) notice and public comment pursuant to 5 U.S.C. 553(b) and (c) and (2) a delayed effective date pursuant to 5 U.S.C. 553(d). The Treasury Department and the IRS will consider public comments submitted in response to the cross-referenced notice of proposed rulemaking published in the Proposed Rules section of this issue of the Federal Register and will promulgate a final rule after considering those comments.

Pursuant to section 7805(f) of the Code, this Treasury decision has been submitted to the Chief Counsel for the Office of Advocacy of the Small Business Administration for comment on its impact on small business.

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), the Office of Information and Regulatory Affairs designated this rule as not a major rule, as defined by 5 U.S.C. 804(2).

This document amends the Manufacturers and Retailers Excise Tax Regulations (26 CFR part 48) to add temporary regulations providing rules relating to claims for payment under section 6435 regarding previously taxed dyed fuel. For the reasons discussed in Part IV of this Background, the temporary regulations limit the claimants under section 6435 to taxpayers that paid to the IRS the prior fuel excise tax under section 4081 with respect to the dyed fuel.

In accordance with section 7805(e)(1), concurrent with the publication of this Treasury Decision, the Department of the Treasury (Treasury Department) and the IRS are publishing in the Proposed Rules section of this issue of the Federal Register a notice of proposed rulemaking (REG-119294-25) containing proposed regulations under section 6435 at proposed § 48.6435-1, the text of which is identical to the text of § 48.6435-1T of the temporary regulations.

Interested persons are directed to the ADDRESSES and Comments and Requests for a Public Hearing sections of the preamble to REG-119294-25 for information on submitting public comments or requesting a public hearing on the proposed regulations.

Section 4081(a) imposes an excise tax (section 4081 tax) on certain removals, entries, and sales of taxable fuel, including diesel fuel and kerosene. Section 4081(a)(2) prescribes the tax rate for the section 4081 tax. Section 4081(a)(2)(A)(iii) prescribes a general tax rate of 24.3 cents per gallon for diesel fuel or kerosene. In addition to that tax rate, section 4081(a)(2)(B) prescribes a tax rate of 0.1 cent per gallon, referred to as the Leaking Underground Storage Tank Trust Fund financing rate (LUST tax).

Under section 4082(a), diesel fuel and kerosene are exempt from the section 4081 tax if the fuel: (i) is destined for a nontaxable use (as defined in section 4082(b)); (ii) is indelibly dyed by mechanical injection in accordance with Treasury regulations; and (iii) meets any marking requirements prescribed in Treasury regulations. Section 4082(f)(1) provides that the exemption in section 4082(a) generally does not apply to the LUST tax.

Section 48.4082-1 and Notice 2005-80, 2005-2 C.B. 953, provide rules and conditions for the exemption provided by section 4082(a) to apply to the removal, entry, or sale of any diesel fuel or kerosene.

Section 70525(a) of Public Law 119-21, 139 Stat. 282 (July 4, 2025), commonly known as the One, Big, Beautiful Bill Act (OBBBA), added section 6435 to allow recovery of the amount of the section 4081 tax paid with respect to diesel fuel or kerosene that later qualifies as exempt from section 4081 tax under section 4082(a).

Section 6435 allows a person that establishes to the satisfaction of the Secretary that the person removed eligible indelibly dyed diesel fuel or kerosene (eligible dyed fuel) from a terminal to claim a payment (without interest) equal to the amount of the section 4081 tax previously paid with respect to such dyed fuel. Eligible dyed fuel is diesel fuel or kerosene: (i) with respect to which tax under section 4081 was previously paid (and not credited or refunded); and (ii) that is exempt from the section 4081 tax under section 4082(a). See section 6435(a) and (b). Section 6435 is effective for eligible dyed fuel removed on or after December 31, 2025. See section 70525(c) of the OBBBA.

Section 6430 provides that no refunds, credits, or payments shall be made under subchapter B of chapter 65 for any LUST tax imposed except with respect to fuels as otherwise provided by section 6430. Section 70525(b)(2) of the OBBBA amended section 6430 to except from the general rule fuels which are removed as eligible dyed fuel under section 6435. Therefore, payments under section 6435 may include the LUST tax.

Announcement 2026-1, 2026-4 I.R.B 402 (released December 22, 2025), requested that taxpayers hold any section 6435 claims until the Treasury Department and the IRS issue guidance related to section 6435 and the process for requesting a refund. The announcement explained that, although section 6435 is functionally similar to other rules providing for payments to taxpayers with respect to previously paid excise tax, section 6435 lacks a directive to treat the payments as if they constitute refunds of overpayments of the underlying tax. Compare section 6435 with sections 6420(e)(1), 6421(g)(1), and 6427(j)(1) of the Code. Further, the OBBBA does not provide a specific appropriation for section 6435 payments. The only appropriation for paying section 6435 claims is the general refund appropriation, which is available only to the extent of an overpayment under section 6402, which requires the claimant to be the same person that paid the section 4081 tax to which the claim relates. See 31 U.S.C. 1324(b)(1) (disbursement may be made from the refund appropriation for “refunds to the limit of liability of an individual tax account”); section 6402 (permitting a refund of an overpayment “on the part of the person who made the overpayment”). Thus, absent a statutory change, the Treasury Department and the IRS lack the authority to pay section 6435 claims to anyone other than the person that paid the section 4081 tax with respect to the eligible dyed fuel to which the claim relates.

These temporary regulations, and the cross-referenced proposed regulations, are the forthcoming guidance referenced in Announcement 2026-1.

These temporary regulations, § 48.6435-1T, provide rules to determine eligibility for a refund under section 6435 with respect to eligible dyed fuel (section 6435 refund) and rules for filing a claim for a section 6435 refund (section 6435 claim).

A. Overview

Section 48.6435-1T(b) provides definitions of terms used for purposes of section 6435 and § 48.6435-1T. Section 48.6435-1T(c) provides that a person that satisfies the requirements of paragraphs (d) through (g) of that section with respect to eligible dyed fuel may receive a payment under section 6435 that is a refund of an overpayment of the section 4081 tax previously paid. Section 48.6435-1T(d) provides conditions that must be satisfied for a section 6435 refund to be allowed to the person that paid the section 4081 tax and incorporates and clarifies the rules in section 6435(b). Section 48.6435-1T(e) provides reporting requirements taxpayers must satisfy to make a section 6435 claim. Section 48.6435-1T(f) provides rules regarding the form and content of a section 6435 claim. Section 48.6435-1T(g) provides the claim period for section 6435 refunds.

B. Definitions

The terms defined in § 48.6435-1T(b) include “approved terminal,” “eligible dyed fuel,” and “section 6435 refund.” To maintain consistency with existing fuel excise tax regulations, the term “approved terminal” has the same meaning as in § 48.4081-1(b).

C. Refund to Taxpayer

Section 48.6435-1T(c) provides that the payment under section 6435 of the amount equal to the section 4081 tax paid to the IRS is the refund (without interest) of an overpayment to the taxpayer that paid the section 4081 tax with respect to the eligible dyed fuel. Section 48.6435-1T(c) incorporates and clarifies the rules in section 6435(a). Section 48.6435-1T(d) makes clear that only a taxpayer that removes the eligible dyed fuel from a terminal and also previously paid the section 4081 tax with respect to that fuel can receive a refund described in § 48.6435-1T(c).

As explained below, to the extent the claimant previously paid the section 4081 tax, the payment described in section 6435 represents a refund of an overpayment. Under section 6402(a), “[i]n the case of any overpayment,” the IRS “may credit the amount of such overpayment . . . against any liability in respect of an Internal Revenue tax on the part of the person who made the overpayment and shall . . . refund any balance to such person.” For a taxpayer to receive a credit or refund, there must first be an overpayment. An overpayment is “any payment in excess of that which is properly due.” Jones v. Liberty Glass Co., 332 U.S. 524, 531 (1947). An overpayment is determined by comparing the amount by which a taxpayer’s payments exceed the amount of tax properly due. For example, a taxpayer that pays $5,000 towards a taxable period or event but owes $4,000 in tax liability for such taxable period or event has an overpayment of $1,000. Section 6402(a) also limits to whom a credit or refund can be made by providing that only “the person who made the overpayment,” that is, the taxpayer subject to the tax and to whom the payments are attributed, is entitled to receive a credit or refund of an overpayment. Roman v. United States, 61 F.4th 1366, 1370 (Fed. Cir. 2023); JetPay Corp. v. United States, 26 F.4th 239, 242 (5th Cir. 2022); Jewell v. United States, 548 F.3d 1168, 1172 (8th Cir. 2008); DeNiro v. United States, 561 F.2d 653 (6th Cir. 1977).

Section 4081(a)(1)(A) generally imposes an excise tax on the removal of taxable fuel (defined in section 4083(a) to include diesel fuel and kerosene) from any refinery or terminal; the entry of taxable fuel into the United States for consumption, use, or warehousing; and the sale of taxable fuel to an unregistered person. In certain circumstances, diesel fuel or kerosene with respect to which tax has previously been imposed may be transported outside the bulk transfer/terminal system and later entered into a terminal that is part of the system. That fuel would also generally be subject to a second instance of the section 4081 tax upon removal from such terminal. In other words, the section 4081 tax may be imposed with respect to fuel more than once. Section 4081(e) and § 48.4081-7 provide a refund mechanism that allows the person that pays the second instance of section 4081 tax to claim a refund in the amount of the second tax paid (without interest). However, if the fuel removed from the terminal is destined for a nontaxable use and dyed pursuant to the provisions of section 4082(a), then the second removal is exempt from section 4081 tax. Section 4081(e) does not apply to such a removal because there is no second instance of section 4081 tax.

Prior to the enactment of section 6435, there was no mechanism allowing a taxpayer to claim a refund when dyed fuel removed from a terminal was previously taxed under section 4081. Section 6435(a) creates such a mechanism by providing for a payment in the amount of the section 4081 tax previously paid (and not credited or refunded) with respect to eligible dyed fuel. However, as explained in Part IV of the Background section, section 6435 does not include language deeming such a payment as a refund of an overpayment of tax and lacks a specific appropriation for section 6435 payments.

The Treasury Department and the IRS view the general appropriation for refunds of Internal Revenue collections in 31 U.S.C. 1324(b) as appropriating funding for section 6435 payments to the extent that the taxpayer claiming the section 6435 payment is the same taxpayer that paid the section 4081 tax with respect to the diesel fuel or kerosene. Accordingly, these regulations provide that if the same taxpayer that paid the section 4081 tax with respect to the diesel fuel or kerosene subsequently removes that fuel from an approved terminal as eligible dyed fuel, such taxpayer can seek a refund under section 6435 of the section 4081 tax it paid. Construing the payment described in section 6435(a) as a refund of an overpayment on the part of the same taxpayer that paid the section 4081 tax to the IRS with respect to the diesel fuel or kerosene is consistent with the Supreme Court’s explanation of how to determine an overpayment in Jones v. Liberty Glass. Accordingly, under section 6435 when a person removes from a terminal eligible dyed fuel with respect to which the person had previously paid section 4081 tax, that person has made an overpayment because, as a result of section 6435, the person has paid more section 4081 tax than is due.

These regulations are also consistent with section 6402(a)’s requirement that only “the person who made the overpayment” is entitled to receive a credit or refund of that overpayment. Reading section 6435 in conjunction with section 6402(a), section 6435(a) requires that the payment be made to the same taxpayer that paid the section 4081 tax with respect to diesel fuel or kerosene and later removes the fuel as dyed for nontaxable use. Thus, under these regulations, the taxpayer entitled to payment under section 6435 is “the person who made the overpayment.”

D. Reporting Requirements

The rules in § 48.6435-1T(e) closely follow existing reporting requirements under § 48.4081-7(c) applicable to section 4081(e) claims with which taxpayers are already familiar. Under § 48.6435-1T(e)(1), a taxpayer must file a section 6435 taxpayer’s report with its section 6435 refund claim. Section 48.6435-1T(e)(2) provides a model report. This model report differs in a few respects from the first taxpayer’s report used for section 4081(e) claims as provided in § 48.4081-7(c)(2). The model report requires a taxpayer to declare that, except for the section 6435 claim to which the report relates, the taxpayer has not received, and will not claim, a credit with respect to, or a refund of, the tax with respect to the diesel fuel or kerosene to which the report relates. The model report also differs by identifying and revoking any prior first taxpayer report filed pursuant to § 48.4081-7(c) by the taxpayer with respect to the fuel that is the subject of the section 6435 taxpayer’s report.

This approach is expected to reduce the burden on taxpayers. It also avoids duplicate reporting for many taxpayers that also file a first taxpayer’s report with their Form 720, Quarterly Federal Excise Tax Return, in accordance with § 48.4081-7(c). A taxpayer may not know after paying section 4081 tax with respect to a particular volume of fuel whether it will sell the fuel as undyed fuel such that there may be a second tax imposed under section 4081 (which may result in a section 4081(e) refund), or whether it will later remove the fuel as eligible dyed fuel (which may result in a section 6435 refund). As such, a section 6435 taxpayer’s report will only be filed once, when a taxpayer makes a section 6435 claim, and need not be filed with the taxpayer’s Form 720 to which the section 4081 tax relates. Such a report will also allow a taxpayer to automatically revoke any first taxpayer’s report with respect to the same fuel.

E. Form and Content of Claim

Section 48.6435-1T(f)(1) provides that a taxpayer must submit a section 6435 claim on Form 8849, Claim for Refund of Excise Taxes. In addition to the section 6435 taxpayer’s report, the Form 8849 must include a completed Schedule 5 (Form 8849), Section 4081(e) and 6435 Claims. A taxpayer cannot make a section 6435 claim on the same Form 8849 as any other claims. For example, if a taxpayer also wishes to make section 4081(e) claims, the taxpayer must submit a separate Form 8849, and include a separate Schedule 5 (Form 8849), for those section 4081(e) claims. Section 48.6435-1T(f)(2) provides the information that must be included in a section 6435 claim.

F. Time for Filing Claim

Section 48.6435-1T(g) provides that the time for filing a section 6435 claim begins after the removal of the eligible dyed fuel and lasts until the end of the period prescribed by section 6511 of the Code for filing a refund claim for the section 4081 tax paid with respect to the fuel.

Section 553(b)(B) of the Administrative Procedure Act (5 U.S.C. Subchapter II) provides that advance notice and the opportunity for public comment are not required with respect to a rulemaking when an “agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.”

The Treasury Department and the IRS find that good cause exists for making these temporary regulations immediately effective without notice and comment because failure to do so would be impracticable and contrary to the public interest.

Section 6435 became effective on December 31, 2025, less than six months after it was enacted as part of the OBBBA on July 4, 2025. In addition to the implementation of this new dyed fuel payment provision, the OBBBA contained sweeping changes to the tax code, with extensive modifications and additions to provisions administered by the IRS, necessitating guidance-drafting and administrative responsibilities across the organization. Given the legal complexity and administration challenges presented by section 6435, discussed below, it is critical to provide taxpayers and the IRS with certainty as soon as possible regarding the rules governing eligibility for, and the procedures for claiming, a payment under section 6435.

Section 6435 is a complex provision that presented interpretation challenges. Specifically, the OBBBA does not direct that these payments be treated as refunds of overpayments of tax, nor does it provide a specific appropriation for payments. Accordingly, the Treasury Department and the IRS were required to determine if and how section 6435 could be implemented consistent with both Congressional intent and the lack of a specific appropriation to make the payments contemplated by section 6435 and then develop appropriate procedures that taxpayers can easily follow to claim section 6435 payments.

As noted, section 6435 became effective on December 31, 2025, and taxpayers are seeking certainty as to whether and how to file claims. It is important to provide that certainty by the issuance of these temporary regulations so that taxpayers understand the procedures they need to follow in order for the IRS to be able to process claims under section 6435 and the limitations on the IRS’s ability to pay those claims. In addition, given that these regulations limit the scope of eligible claimants under section 6435 to taxpayers that paid the underlying section 4081 tax, taxpayers also need certainty as soon as possible to enable them to structure their business arrangements in a manner that results in eligibility for the section 6435 payment.

The guidance in these regulations also preserves government resources by discouraging taxpayers from filing claims that the IRS lacks the legal authority to pay. Issuing this guidance quickly also protects the Federal fisc as a delay in guidance would increase the likelihood of unappropriated funds being disbursed.

Following notice-and-comment procedures would delay when taxpayers receive the certainty provided by the rules and procedures in these temporary regulations. Issuing immediately effective regulations avoids wasting resources and ensures eligible taxpayers can claim section 6435 refunds as enacted by the OBBBA to the extent appropriations are authorized by 31 U.S.C. 1324(b). Having immediately effective regulations also provides the IRS certainty as to appropriations boundaries regarding section 6435 refunds and enables the IRS to process claims without waiting for notice-and-comment regulations or risking uneven implementation.

Because of the limited time to provide the requisite certainty to taxpayers and the IRS without unduly delaying the ability of eligible taxpayers to file claims that the IRS is authorized to pay, it was impracticable to conduct notice-and-comment procedures. The limited time available to prepare these regulations is an important factor in finding good cause. See Petry v. Block, 737 F.2d 1193 (D.C. Cir. 1984). Accordingly, it is in the public interest to both provide these temporary regulations without following notice-and-comment procedures and to make them effective immediately.

Comments are being solicited in the cross-referenced notice of proposed rulemaking that is in the proposed rules section in this issue of the Federal Register. Any comments will be considered before final regulations are issued.

These temporary regulations are not subject to review under section 6(b) of Executive Order 12866 pursuant to the Memorandum of Agreement (July 4, 2025) between the Treasury Department and the Office of Management and Budget (OMB) regarding review of tax regulations.

The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) (PRA) generally requires that a Federal agency obtain the approval of the Office of Management and Budget (OMB) before collecting information from the public, whether such collection of information is mandatory, voluntary, or required to obtain or retain a benefit. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by the OMB.

These temporary regulations set forth intended collections of information to be provided to the IRS with Form 8849 and Schedule 5 (Form 8849).

The collections of information associated with these temporary regulations include reporting and recordkeeping requirements that are necessary to ensure that a taxpayer qualifies for a section 6435 refund. The collections will be used by the IRS for tax compliance purposes and by taxpayers to establish eligibility for a section 6435 refund.

The reporting requirements include reporting related to claiming a section 6435 refund, including the execution and filing of reports as detailed in § 48.6435-1T(e). The recordkeeping requirements include that a taxpayer keep records to establish its eligibility for and the amount of a section 6435 claim. The burden for these requirements is included with Form 8849 and its instructions and with Schedule 5 (Form 8849) and its instructions. These forms and form instructions are already approved under OMB control number 1545-1420.

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.

For applicability of the Regulatory Flexibility Act, please refer to the cross-referenced notice of proposed rulemaking (REG-119294-25) published elsewhere in this issue of the Federal Register.

Pursuant to section 7805(f), these temporary regulations will be submitted to the Chief Counsel of Advocacy of the Small Business Administration for comment on their impact on small business.

Section 202 of the Unfunded Mandates Reform Act of 1995 requires that agencies assess anticipated costs and benefits and take certain other actions before issuing a final rule that includes any Federal mandate that may result in expenditures in any one year by a State, local, or Tribal government, in the aggregate, or by the private sector, of $100 million (updated annually for inflation). These temporary regulations do not include any Federal mandate that may result in expenditures by State, local, or Tribal governments, or by the private sector, in excess of that threshold.

Executive Order 13132 (Federalism) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial direct compliance costs on State and local governments and is not required by statute, or preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive order. These temporary regulations do not have federalism implications and do not impose substantial direct compliance costs on State and local governments or preempt State law within the meaning of the Executive order.

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), the Office of Information and Regulatory Affairs designated this rule as a non-major rule as defined by 5 U.S.C. 804(2).

Section 412 of the Code provides minimum funding requirements that generally apply for defined benefit plans. Pursuant to § 412(a)(2), § 430 sets forth the minimum funding requirements that apply to a defined benefit plan (other than a multiemployer plan described in § 414(f) or a CSEC plan described in § 414(y)). Section 430(a) defines the minimum required contribution for such a plan by reference to the plan’s funding target for the plan year. Under § 430(d)(1), a plan’s funding target for a plan year generally is the present value of all benefits accrued or earned under the plan as of the first day of that plan year.

Section 430(h)(3) provides rules regarding the mortality tables that generally are used under § 430. Under § 430(h)(3)(A), except as provided in § 430(h)(3)(C) or (D), the Secretary is to prescribe by regulation mortality tables to be used in determining any present value or making any computation under § 430.¹ Those tables are to be based on the actual experience of pension plans and projected trends in that experience. In accordance with that standard, the Department of the Treasury and the Internal Revenue Service issued § 1.430(h)(3)-1 to provide base mortality tables and mortality improvement rates that apply for valuation dates occurring on or after January 1, 2024.

Section 1.430(h)(3)-1(a)(1) permits the projection of mortality improvement to be applied in either of two ways: through use of generational mortality tables or through use of static mortality tables (available only to small plans described in § 1.430(h)-1(c)(1)(ii)) that are updated annually to reflect expected improvements in mortality. Note 1 to § 1.430(h)(3)-1(c)(1)(iv) states that the static mortality tables for valuation dates occurring in calendar years starting with 2025 will be published in the Internal Revenue Bulletin.

Section 431 provides the minimum funding standards for multiemployer plans that are subject to § 412. Section 431(c)(6)(D)(iv) provides that the Secretary may by regulation prescribe mortality tables to be used in determining current liability for purposes of § 431(c)(6)(B). Section 1.431(c)(6)-1 provides that the same mortality assumptions that apply for purposes of § 430(h)(3)(A) and § 1.430(h)(3)-1(a)(2) are used to determine a multiemployer plan’s current liability for purposes of applying the full-funding rules of § 431(c)(6). For this purpose, either the generational mortality tables or the static mortality tables are permitted to be used without regard to whether the plan is a small plan.

Section 433 provides the minimum funding standards for CSEC plans. Section 433(h)(3)(B)(i) provides that the Secretary may by regulation prescribe mortality tables to be used in determining current liability for purposes of § 433(c)(7)(C). Section 1.433(h)(3)-1(a) provides that the mortality tables described in § 430(h)(3)(A) are to be used to determine current liability under § 433(c)(7)(C). For this purpose, either the generational mortality tables or the static mortality tables are permitted to be used without regard to whether the plan is a small plan.

Section 417(e)(3) generally provides that the present value of certain accelerated forms of benefit under a qualified pension plan (including single-sum distributions) must not be less than the present value of the accrued benefit using applicable interest rates and the applicable mortality table. Section 417(e)(3)(B) defines the term “applicable mortality table” as the mortality table specified for the plan year under § 430(h)(3)(A) (without regard to § 430(h)(3)(C) or (D)), modified as appropriate by the Secretary. Under § 1.417(e)-1(d)(2)(i), the applicable mortality table for a calendar year is the mortality table that is prescribed by the Commissioner in guidance published in the Internal Revenue Bulletin.

Rev. Rul. 2007-67, 2007-2 CB 1047, provides that, except as otherwise stated in future guidance, the applicable mortality table under § 417(e)(3) is a static mortality table set forth in published guidance that is developed based on a fixed blend of 50 percent of the static male combined mortality rates and 50 percent of the static female combined mortality rates used under § 1.430(h)(3)-1. Rev. Rul. 2007-67 also provides that the applicable mortality table for a calendar year applies to distributions with annuity starting dates that occur during stability periods that begin during that calendar year.

STATIC MORTALITY TABLES FOR 2027

The static mortality tables that apply under § 430(h)(3)(A) for valuation dates occurring during 2027 are set forth in the appendix to this notice. The mortality rates in these tables have been developed using the methodology set forth in § 1.430(h)(3)-1(c), the base mortality rates set forth in § 1.430(h)(3)-1(d), and the mortality improvement rates that are incorporated by reference under § 1.430(h)(3)-1(b)(1)(iv)(A).

The static mortality table that applies under § 417(e)(3) for distributions with annuity starting dates occurring during stability periods beginning in 2027 is set forth in the appendix to this notice in the column labeled “Unisex.” The mortality rates in this table are derived from the mortality tables specified under § 430(h)(3)(A) for 2027 in accordance with the procedures set forth in Rev. Rul. 2007-67.

These proposed regulations are not subject to review under section 6(b) of Executive Order 12866 pursuant to the Memorandum of Agreement (July 4, 2025) between the Treasury Department and the Office of Management and Budget regarding review of tax regulations.

Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6), it is hereby certified that these proposed regulations will not have a significant economic impact on a substantial number of small entities. The EA SEE user fee primarily affects individuals who take the EA SEE. Only individuals, not businesses, can be enrolled agents. Thus, the economic impact of these regulations on any small entity would be a result of an individual enrolled agent owning a small entity or a small entity employing an enrolled agent who must take the EA SEE. The Treasury Department and the IRS estimate that an average of 28,898 EA SEE examination parts will be taken by individuals annually. Therefore, a substantial number of small entities is not likely to be affected. Additionally, the economic impact on those entities is not significant. These regulations will establish a $66 fee per examination part (plus $251 payable directly to the third-party contractor) and will not have a significant economic impact on a small entity. Accordingly, the rule is not expected to have a significant economic impact on a substantial number of small entities, and a regulatory flexibility analysis is not required.

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) requires that agencies assess anticipated costs and benefits and take certain other actions before issuing a final rule that includes any Federal mandate that may result in expenditures in any one year by a State, local, or Tribal government, in the aggregate, or by the private sector, of $100 million in 1995 dollars, updated annually for inflation. This rule does not include any Federal mandate that may result in expenditures by State, local, or Tribal governments, or by the private sector in excess of that threshold.

Executive Order 13132 (Federalism) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial, direct compliance costs on State and local governments, and is not required by statute, or preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive order. These interim final regulations do not have federalism implications and do not impose substantial direct compliance costs on State and local governments or preempt State law within the meaning of the Executive order.

Pursuant to section 7805(f) of the Code, this notice of proposed rulemaking has been submitted to the Chief Counsel for the Office of Advocacy of the Small Business Administration for comment on its impact on small business.

These proposed regulations are not subject to review under section 6(b) of Executive Order 12866 pursuant to the Memorandum of Agreement (July 4, 2025) between the Treasury Department and the Office of Management and Budget (OMB) regarding review of tax regulations.

The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) (PRA) generally requires that a Federal agency obtain the approval of the OMB before collecting information from the public, whether such collection of information is mandatory, voluntary, or required to obtain or retain a benefit. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by the OMB.

These proposed regulations set forth intended collections of information to be provided to the IRS with Form 8849, Claim for Refund of Excise Taxes, and Schedule 5 (Form 8849), Section 4081(e) and 6435 Claims.

The collections of information in these proposed regulations would include reporting and recordkeeping requirements that are necessary to ensure that a taxpayer qualifies for a section 6435 refund. The collections would be used by the IRS for tax compliance purposes and by taxpayers to establish eligibility for a section 6435 refund.

The reporting requirements would include reporting related to claiming a section 6435 refund, including the execution and filing of reports as detailed in proposed § 48.6435-1(e). The recordkeeping requirements would include that a taxpayer keep records to establish its eligibility for and the amount of a section 6435 claim. The burden for these requirements is included with Form 8849 and its instructions and with Schedule 5 (Form 8849) and its instructions. These forms and form instructions are already approved under OMB control number 1545-1420.

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.

These proposed regulations would not change or create new collection requirements beyond the requirements that are being reviewed and approved by OMB under the temporary regulations.

Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6), it is hereby certified that these proposed regulations will not have a significant economic impact on a substantial number of small entities within the meaning of section 601(6) of the Regulatory Flexibility Act.

As discussed in Announcement 2026-1, 2026-4 I.R.B 402 (released December 22, 2025), absent a statutory change, the Treasury Department and the IRS lack the authority to pay section 6435 claims to anyone other than the person that paid the section 4081 tax to the IRS with respect to the eligible dyed fuel to which the claim relates. Section 6435 allows a person that establishes to the satisfaction of the Secretary that the person removed eligible indelibly dyed diesel fuel or kerosene (eligible dyed fuel) from a terminal to claim a payment (without interest) equal to the amount of the section 4081 tax previously paid with respect to such dyed fuel. The proposed regulations would provide needed guidance for such taxpayers on eligibility and filing procedures for making a section 6435 claim. These proposed regulations would establish reporting procedures, including a model report, that allow the IRS to verify a taxpayer’s entitlement to a payment under section 6435 as contemplated by the statute. Accordingly, the Treasury Department and the IRS intend that the proposed rules provide clarity for taxpayers on the availability and claim procedures for a payment under section 6435.

These proposed regulations would affect a narrow subset of businesses within the fuel industry: taxpayers removing dyed fuel from an approved terminal with respect to which they previously paid tax. Because section 6435 first went into effect on December 31, 2025, no historical data is available on the number or size of section 6435 claimants. While there is uncertainty as to the exact number of small businesses within this group, such taxpayers are necessarily a subset of taxpayers filing Form 720 with respect to certain taxes paid on diesel fuel and kerosene. From 2021 to 2024, more than 85 percent of such identifiable Form 720 filers were businesses with total positive incomes of at least $25 million, and more than two-thirds were businesses with total assets of at least $25 million. Moreover, under section 4081(e), the most analogous existing provision, the vast majority of taxpayers the IRS can identify have total positive incomes and assets of at least $100 million. This data is constrained by issues matching between databases, but the IRS has no reason to believe it is skewed. As such, of the relatively few taxpayers affected by section 6435, nearly all can be expected to be predominantly large, sophisticated businesses in the fuel industry.

Even if a substantial number of small entities are affected, the economic impact of these proposed regulations on small entities is not likely to be significant. The proposed regulations would provide taxpayers with guidance regarding the eligibility and filing requirements for section 6435, including the reporting requirements. As explained in the PRA section, the reporting and recordkeeping obligations imposed by these proposed regulations would include filing a report to make a claim. It is estimated that fewer than 60 taxpayers will prepare one or more of such reports annually and that each report will take no more than one hour to complete.

Accordingly, the Secretary of the Treasury certifies that these proposed regulations will not have a significant economic impact on a substantial number of small entities. The Treasury Department and the IRS specifically invite comments from any party, particularly affected small entities, on the accuracy of this certification.

Pursuant to section 7805(f), this notice of proposed rulemaking has been submitted to the Chief Counsel for the Office of Advocacy of the Small Business Administration for comment on its impact on small business.

Section 202 of the Unfunded Mandates Reform Act of 1995 requires that agencies assess anticipated costs and benefits and take certain other actions before issuing a final rule that includes any Federal mandate that may result in expenditures in any one year by a State, local, or Tribal government, in the aggregate, or by the private sector, of $100 million (updated annually for inflation). These proposed regulations do not include any Federal mandate that may result in expenditures by State, local, or Tribal governments, or by the private sector, in excess of that threshold.

Executive Order 13132 (Federalism) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial direct compliance costs on State and local governments and is not required by statute, or preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive order. These proposed rules do not have federalism implications and do not impose substantial direct compliance costs on State and local governments or preempt State law within the meaning of the Executive order.