Notice 2015-26: Empowerment zone termination date

Notice 2015-26: Empowerment zone termination date

The IRS today released an advance version of Notice 2015-26 as guidance concerning how a state or local government can secure an extension of the period in which an area will be designated as an empowerment zone, to comport with the extension of the federal empowerment zone rules through December 31, 2014, by the tax extenders legislation that was enacted December 19, 2014.

Related content

Read text of Notice 2015-26 [PDF 19 KB]


Some activities conducted in an empowerment zone are allowed preferential federal income treatment. Empowerment zones are designated by the federal government, after being nominated by a state or local government. The nominations generally included a termination date for the designation, set by the state or local government. The termination dates were generally December 31, 2009, which was the date the federal empowerment zone rules were set to expire when the program began.

The federal empowerment zone rules have been extended several times since then, most recently in the 2014 extenders legislation—from December 31, 2013, to December 31, 2014.

Following past extensions of the federal rules, the IRS has granted a deemed extension of the termination date specified for a zone by the state or local government, to match the new expiration date under federal law, unless the state or local government declined the extension. No deemed extension has ever been declined. Thus, designations of all empowerment zones that were in effect on December 31, 2009, have had a termination date of December 31, 2013.

Notice 2015-26 provides a deemed extension of these termination dates through December 31, 2014, unless the state or local government declines the extension, in writing. The notice provides procedures for doing so.

Accordingly, any nomination of an empowerment zone by a state or local government with a current deemed termination date of December 31, 2013, is deemed to be amended to provide for a new termination date of December 31, 2014, unless the nominating entity sends written notification to the IRS by May 11, 2015.

The written notification must affirmatively decline extension of the empowerment zone nomination through December 31, 2014. Otherwise, the designation of that empowerment zone ends on December 31, 2014.

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Request for proposal



KPMG's new digital platform

KPMG's new digital platform