Overview
Law360 quoted Lisa Zarlenga in a February 25 article titled "Three Lingering Concerns About The Carbon Capture Tax Credit." The article discusses the final regulations released by the IRS on the newly revised carbon capture tax credit and takes a closer look at the areas where clarity is still needed on the credit.
Zarlenga tells Law360 that the IRS provided a nonexhaustive list of exceptions to recapture, which included volcanic activity and terrorist attacks. Those examples are instructive, but it would have been more helpful had the agency added more items to that list, even if it's not comprehensive, she adds.
That's because if a company experiences a leakage event that's due to some cause not explicitly listed by the IRS, it could lead to a prolonged back-and-forth over the issue and perhaps even litigation, Zarlenga says. "If the IRS doesn't provide the guidance at the front end, they're going to have to do something at the back end. It was disappointing to see that they didn't expand on that list, even though it is not exhaustive — it would have been helpful to have a larger list of examples."
The full article can be read at Law360 (subscription required).
