Developers Want Contract Clarity in IRS Energy Tax Credit Notice

IRS guidance on new restrictions on clean energy tax credits fails to address some of the most pressing issues tax practitioners say are creating headaches in the tax equity and tax credit transfer markets.

The Treasury Department and IRS Feb. 12 released guidance on the material assistance provision of the prohibited foreign entity rules that restrict tax benefits for clean energy projects if developers have ties to covered nations, such as China and Russia. The guidance answered most questions around supply chain foreign limits, but tax professionals say they need more details around contracts and debt restrictions.

The foreign restrictions ...