In a recent public hearing, members of the energy industry and their counsel – among them Partner Jeff Paravano and Counsel Nicholas Mowbray – encouraged the U.S. Treasury Department and the IRS to revise proposed rules involving the direct payment of clean energy tax credits.
The current plan would set up roadblocks for direct tax credit payments to some entities by prohibiting “chaining,” a practice whereby “unrelated recipients of transferred tax credits” are able to receive direct payments for those credits, according to an Aug. 21 Law360 article.
Paravano told Law360 that the Inflation Reduction Act intended to allow taxpayers to increase the amount they can invest in clean energy, adding that lawmakers have already taken steps to keep credits from being transferred more than once and could have imposed greater restrictions, but did not. Paravano was quoted on the same topic in an Aug. 22 Tax Notes article titled “Energy Sector Pushes for Partnerships in Direct-Pay Hearing” (subscription required).
Mowbray was quoted in an Aug. 21 Bloomberg Law article titled “Clean Energy Industry Urges IRS to Rework Direct Pay Rules” (subscription required). He told the publication that client GameChange Solar wants purchased credits to be eligible for direct payment, and the company also recommended that the IRS at least provide “a narrow exception for companies that produce eligible components and substantially participate in the manufacture of eligible components.”