The IRS's Tax Exempt and Government Entities (TE/GE) division has announced, in an Exempt Organizations Update (EO Update), that it will be offering additional virtual office hours to assist eligible entities with the pre-filing registration process for the new Inflation Reduction Act (IRA) and Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act Pre-Filing Registration Tool.

Applicable entities and eligible taxpayers must complete the pre-filing registration process through the Pre-filing Registration Tool to take advantage of elective payment or the transfer of credits available under the IRA and CHIPS Act.

The virtual office hours will be conducted weekly on Wednesdays from 1-2:30 PM EST beginning on February 28, 2024 and concluding on April 24, 2024. Representatives from the IRS will be available during the virtual office hours to answer questions about the pre-filing registration process. Registration is required and can completed using the links provided in the EO Update.

Background

In June 2023, the IRS released temporary regulations (TD 9975) on the electronic pre-filing registration requirements. On March 5, 2024, the IRS released final regulations on the direct-pay election of applicable energy credits (see Tax Release 2024-0518) and CHIPS advanced manufacturing investment credits (see Tax Release 2024-0519).

Under the pre-filing requirements, taxpayers interested in making a direct-pay election must obtain a registration number for each eligible property by supplying the required information about the applicable credits and property. The IRS will issue a separate registration number for each applicable credit property, which will only be valid for one year and must be renewed each year. The registration number must be included on the taxpayer's annual tax return. Once made, the election is irrevocable and applies to any applicable credit for the tax year for which the election is made.

Taxpayers seeking to transfer credits must obtain a registration number for each eligible facility, which then must be given to the transferee taxpayer and used to complete a transfer election statement. The transferor must provide the IRS with supporting documentation on the construction or acquisition of the eligible credit property (e.g., permits, leases) and provide documentation to validate the existence of the eligible credit property, any bonus credits, and the evidence of credit qualification. The transfer election statement must then be attached to the tax returns of both parties.

Implications

In hosting these office hours, the IRS provides entities a unique opportunity to speak directly with IRS representatives and get answers to questions regarding the new IRA credit pre-filing registration process. Organizations that are considering making such an elective payment election should consider attending one of the many time slots provided before the office hours conclude at the end of April.

———————————————

RELATED RESOURCES

— For more information about EY's Exempt Organization Tax Services group, visit us here.