Tax News Update    Email this document    Print this document  

November 8, 2022
2022-1678

IRS and Treasury release 20222023 guidance plan listing energy-related projects, request comments on certain IRA energy provisions

  • The IRS and Treasury plan to develop new guidance on energy provisions enacted under the Inflation Reduction Act.
  • Taxpayers interested in investing in energy transition and renewable energy projects should follow these developments.

On November 4, 2022, the IRS and Treasury released the 2022–2023 Priority Guidance Plan, which lists the projects to which the IRS and Treasury will allocate resources for plan year July 1, 2022 through June 30, 2023. The guidance plan contains 10 projects concerning energy security.

In addition, the IRS released three notices requesting comments on energy-related tax credits enacted by the Inflation Reduction Act (IRA).

Guidance plan

The guidance plan lists 10 projects related to energy provisions. Seven of the projects concern guidance related to the IRA provisions on:

  • Clean electricity and carbon emissions reduction (including the definition of qualifying energy property under IRC Section 48)
  • Clean fuels (Notice 2022-39 on claiming credit for alternative fuels sold or used in the first three quarters of 2022 was released on September 13, 2022)
  • Clean energy and energy efficiency incentives for individuals (including regulations under IRC Section 179D to clarify the definition of software designers)
  • Clean vehicles
  • Investments in clean energy manufacturing and energy security (including advanced energy project credits and the advanced manufacturing credit)
  • Incentives for clean electricity and clean transportation
  • Credit monetization (including direct pay and tax credit transferability)

The guidance plan also listed three projects for guidance on:

  • The lifecycle analysis submission and review process under IRC Section 45Q
  • The IRC Section 45J credit for production from advanced nuclear power facilities
  • Public utility property under IRC Section 168(i)(10) for purposes of normalization

Request for comments

Separately, the IRS published three notices requesting comments on various aspects of the energy-related tax credits in the IRA. Comments are due by December 3, 2022. The IRS seeks comments regarding:

Implications

While the IRA represented a monumental investment in climate and energy-transition-related investments and technologies, timely and actionable regulatory guidance is sorely needed for a variety of technologies. Taxpayers ought to carefully review any proposed guidance and evaluate the potential implications to current and proposed investments in the energy space.

———————————————

Contact Information
For additional information concerning this Alert, please contact:
 
Energy Taxation Group
   • Greg Matlock, Americas Energy Transition and Renewable Energy Leader (greg.matlock@ey.com)
   • Brian Murphy, Americas Power & Utilities Tax Leader (brian.r.murphy@ey.com)
   • Christine Chai (christine.chai@ey.com)

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor