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ARTICLE · 05 MARCH 2026

IRS Issues Interim Guidance On "Material Assistance" From A Prohibited Foreign Entity

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On February 12, 2026, the Department of the Treasury ("Treasury") and the Internal Revenue Service ("IRS") released Notice 2026-15 (the "Notice"), providing long-awaited interim guidance on the restrictions on receiving "material assistance" from a prohibited foreign entity ("PFE") that were enacted by the One Big Beautiful Bill Act (the "OBBBA").

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Daniel T. Kiely
Daniel T. Kiely
Karen Kim
Karen Kim
Isaac L. Maron
Isaac L. Maron
Warren S. Payne
Warren S. Payne
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On February 12, 2026, the Department of the Treasury ("Treasury") and the Internal Revenue Service ("IRS") released Notice 2026-15 (the "Notice"), providing long-awaited interim guidance on the restrictions on receiving "material assistance" from a prohibited foreign entity ("PFE") that were enacted by the One Big Beautiful Bill Act (the "OBBBA"). The Notice provides important clarifications to the application of the "material assistance" requirement which generally can disqualify a taxpayer from being able to claim the Advanced Manufacturing Tax Credit (Section 45X), Clean Electricity Production Credit (Section 45Y) and the Clean Electricity Investment Credit (Section 48E) if the taxpayer's project costs attributable to equipment manufactured by a PFE (e.g., solar panels manufactured in China) exceed a certain threshold. The Notice describes (1) rules expected to be included in forthcoming proposed regulations; (2) guidance regarding the calculation of the material

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