IRS Likely to Prioritize Endowment Tax, Elective Pay Enforcement

Practitioners expect the IRS to prioritize endowment tax and energy credit elective pay issues in its upcoming enforcement strategies.

Under the previous administration, the IRS tax-exempt division had already said its compliance strategies would include the endowment tax, enacted on wealthy universities, and elective pay, a provision of the 2022 tax-and-climate law allowing tax-exempt organizations to receive cash payments instead of tax credits for eligible energy projects.

The new administration has been critical of elite universities and energy tax credits, so these areas will likely continue to be a focus, said Preston Quesenberry, managing director at KPMG US, during a ...