Taxpayers may be able to claim the PWA multiplier for certain credits if a project’s “beginning of construction date” is before Jan. 30, 2023.
Advertisement
Topics
Credits
Clean fuel production credit: Regulatory roadblocks ahead
Early guidance for the new Sec. 45Z clean fuel production credit raises concerns regarding the eligibility of fuel sales to wholesalers.
CHIPS Act final regs. offer many taxpayer-friendly provisions
Congress incentivized domestic manufacturing of semiconductors and semiconductor manufacturing equipment as part of the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act of 2022.
Placing in service the benefits of the Inflation Reduction Act
Determining when energy property is eligible for a tax credit or deduction hinges on when it is first placed in service, which can be controversial.
Legacy clean-energy credits evolve into tech-neutral credits
The transition beginning in 2025 entails certain new requirements but also opportunities.
FTR notification requirement for taxpayers under LB&I examination
A foreign tax redetermination may require taxpayers under Large Business and International Division examination to notify the IRS, which will redetermine the U.S. tax owed.
The research credit: Business-component requirement
The Fifth Circuit’s decision in Grigsby, 86 F.4th 602 (5th Cir. 2023), emphasizes the need for taxpayers to clearly define business components when preparing and documenting their Sec. 41 credit.
Tax Court declines to limit discovery for sampled research credit claims
In two cases, the court rebuffed taxpayers’ attempts to restrict its inquiry to a selected subset of the projects for which they claimed the Sec. 41 credit.
Employee retention credit updates
Practitioners need an understanding of claim disallowance appeals and requests for additional
information, as well as insight into how the voluntary disclosure program may affect practitioners themselves.
The Inflation Reduction Act’s prevailing wage and apprenticeship requirements
Taxpayers engaging in certain clean energy activities are eligible for increased credits or deductions for qualifying if they adhere to the Inflation Reduction Acts prevailing wage and apprenticeship requirements.
Overlapping expenses affect multiple tax credit calculations
The Fourt Circuit affirmed the Tax Court’s decision that a taxpayer could not ignore the coordination rule in Sec. 45C(c)(2) when calculating the Sec. 41 research credit for a tax year in which the taxpayer claimed the Sec. 45C orphan drug credit for qualified clinical testing expenses that also were qualified research expenses for purposes of the research credit.
The CHIPS Act’s advantageous direct-pay election
This article summarizes the key features of the direct-pay election for the advanced manufacturing credit, which allows taxpayers to treat the credit as a direct payment against their federal income tax.
ERC supplemental claim process opened for third-party payroll companies
The IRS announced that it will open a supplemental claim process to help third-party payers and their clients resolve incorrect claims for the employee retention credit. The deadline is Nov. 22.
A process of experimentation: Production expenses for the R&D tax credit
When claiming research and development tax credits, a taxpayer may be able to include production activities in the “substantially all” calculation by presenting detailed evidence that those production activities constitute a process of experimentation under Sec. 41(d)(3)(A).
Recapture considerations for Inflation Reduction Act credits
The Inflation Reduction Act not only created $663 billion in new energy-related credits over 10 years, but it also expanded opportunities to monetize many of the energy tax credits through direct payment and transfer elections.
Regs. cover green energy incentive wage and apprenticeship requirements
Under new final regulations issued by the IRS, taxpayers can generally increase the base amount of certain credits or deductions by five times when they meet prevailing wage and apprenticeship requirements.
Rights for the R&D credit and Sec. 174
When claiming the Sec. 41 research and development credit for funded research, a taxpayer must determine whether it possesses economic risk related to the success of the research and retains substantial rights to the research results. How that correlates to a “right to exploit” research under Sec. 174 still needs clarification.
The clean fuel production credit: A new incentive regime
The Sec. 45Z credit for production of low-emission motor fuels will largely replace a diverse set of expiring fuel incentives when it goes into effect in 2025.
The research credit: Adaptation exclusion
A recent Tax Court case sheds light on the uncertainty test for qualified research activities and its relation to the adaptation exclusion of expenditures eligible for the Sec. 41 research credit.
The research credit: Documenting qualified services
Court decisions delineate common pitfalls for companies claiming the Sec. 41 credit of substantiating qualified research expenditure amounts and whether the company followed a process of experimentation.
employee benefits & pensions
Profits interests: The most tax-efficient equity grant to employees
By granting them a profits interest, entities taxed as partnerships can reward employees with equity. Mistakes, however, could cause challenges from taxing authorities.
