The court granted summary judgment for five of seven plaintiffs challenging IRS Notice 2025-42. The order declared the notice violated the Administrative Procedure Act and remanded it to the agency.
The ruling preserves the prior regulatory framework for projects seeking to qualify for two significant tax credits under 26 U.S.C. §§ 45Y and 48E. Under current law, those credits are available only for projects that either begin construction on or before July 4, 2026, or are completed and placed in service on or before December 31, 2027.
The central dispute concerned what taxpayers must do by the July 4 deadline to lock in eligibility. The IRS had issued the challenged notice to clarify the requirements, but the court declared the notice arbitrary and capricious.
The order dismissed two of the seven plaintiffs, Hopi Utilities Corporation and Maryland Office of People’s Counsel, from the action. The court granted summary judgment in favor of the remaining five plaintiffs: Oregon Environmental Council, Natural Resources Defense Council, Inc., Public Citizen, Woven Energy LLC, and the City and County of San Francisco.
The court denied the IRS’s motion for summary judgment and granted in part and denied in part the agency’s motion to dismiss.
The court issued the decision on June 6, 2026, noting the time sensitivity of the matter. The order is final and appealable.