IRS Notice 2026-15 Guidance Seen Shaping FEOC Risk and Tax Incentive Modeling

According to a recent LinkedIn post from Concentro, the Internal Revenue Service has issued Notice 2026-15 providing new guidance on Foreign Entity of Concern (FEOC) rules. The post indicates that while some key policy questions remain open, the updates on material assistance at the project level appear practical and largely in line with market expectations.

The company’s LinkedIn post highlights four main elements with potential implications for U.S. clean energy and related infrastructure projects. First, domestic content safe harbor tables may now be used to calculate the material assistance cost ratio via a “Cost Percentage Safe Harbor,” excluding non‑listed components such as steel and iron from the calculation.

The post also notes a temporary certification reliance safe harbor that allows taxpayers to rely on non‑PFE supplier certifications, provided there is no reason to doubt their accuracy. The allowance for partial certificates focused on PFE‑exposed direct costs could reduce administrative friction for project sponsors and supply chain partners.

According to the LinkedIn summary, the IRS has yet to clarify core definitions around PFE ownership and effective control, as well as recapture rules and mechanisms. This ongoing uncertainty may continue to influence risk assessments for tax equity investors, lenders, and developers structuring projects around Inflation Reduction Act–linked incentives.

The post further points to guidance on tracking and averaging methods for allocating costs to projects, qualified interconnection equipment, and lookback periods. For investors, clearer allocation methodologies could improve financial modeling of eligible tax benefits, though the unresolved ownership and recapture issues still represent a policy overhang for long‑dated capital commitments.