Overview
Partner Lisa Zarlenga, of counsel John Cobb, and associate Nick Sutter co-authored an article entitled "Energy Tax Credit Deals Need to Account for Trump Uncertainty," published by Bloomberg Tax. The article explains how the Trump administration is considering substantial modifications to energy tax credits introduced by the Inflation Reduction Act nearly three years ago, creating uncertainty for parties involved in tax credit transfer agreements.
Legislative developments could see these credits reduced or eliminated to offset the costs of extending expiring provisions of the Tax Cuts and Jobs Act. Proposed adjustments may include shortening eligibility periods, adding restrictions related to foreign entities, or repealing transferability and direct pay provisions. The IRS faces funding and workforce challenges, potentially impacting the timely issuance of necessary registration numbers for credit transfers. Amid this turbulence, parties are encouraged to monitor legislative and regulatory changes closely, strengthen change-in-law provisions in their agreements, and consider transactional tax insurance policies to safeguard against future uncertainties.
Visit Bloomberg Tax to access the article in full (subscription may be required).
