Required Summer Reading From the IRS: Transfer and Elective Payment Rules, Part 2

Required Summer Reading From the IRS: Transfer and Elective Payment Rules, Part 2

July 10, 2023, Tax Notes

Jamin Koo’s commentary was included in a Tax Notes article describing how proposed tax policies stemming from the Inflation Reduction Act will advance clean energy. Jamin shared his insight on how the proposed regulations may constrict the market’s expansion.

“Compared with larger and more established developers, smaller developers without a significant cash reserve or track record of financial performance will have difficulty finding buyers that are willing to accept their indemnities. An exception or relief for those developers could allow buyers  of smaller credit amounts to transact with confidence without the risk of excessive transfer and recapture liabilities in case they’re unable to recover from sellers with small projects,” Jamin said.

He added that “Treasury and the IRS have stated that vehicle purchasers claiming the section 30D clean vehicle credit can rely on certifications from manufacturers. Instead of clawing back credits from purchasers, the IRS may recover from manufacturers using fraud penalties.”

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