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 eligible energy property to December 31, 2023. In addition, sections 131(c) and 132(b) of the TCDTRA extended the beginning of construction deadlines for the phaseout provisions applicable to the PTC and the ITC. Finally, section 204 of the TCDTRA amended § 48(a)(5) to provide special rules for "qualified offshore wind facilities."

The Department of the Treasury (Treasury Department) and the IRS have published several notices regarding the beginning of construction requirement. Notice 2013-29 provides two methods to establish that the beginning of construction requirement under §§ 45 and 48(a)(5) has been satisfied with respect to a facility: the Physical Work Test and the Five Percent Safe Harbor. Both methods require a taxpayer to make continuous progress towards completion of the facility once construction has begun (Continuity Requirement).

Section 4 of Notice 2013-29 provides the Physical Work Test. Section 4.01 of Notice 2013-29 provides:


 * Construction of a qualified facility begins when physical work of a significant nature begins. . . . Whether a taxpayer has begun construction of a facility before [the statutory deadline] will depend on the relevant facts and circumstances. The Internal Revenue Service will closely scrutinize a facility, and may determine that construction has not begun on a facility before [the statutory deadline] if a taxpayer does not maintain a continuous program of construction as determined under section 4.06.

Section 4.06(1) of Notice 2013-29 provides that a continuous program of construction involves continuing physical work of a significant nature (Continuous Construction Test). Further, section 4.06(1) of Notice 2013-29 provides that whether the taxpayer has maintained a continuous program of construction will be determined by the relevant facts and circumstances.