Source: http://oicattorney.blogspot.com/2009/04/irs-reminds-taxpayers-of-tax-savings.html
Timestamp: 2017-10-18 00:17:21
Document Index: 127740016

Matched Legal Cases: ['§25', '§25', '§25', '§25', '§25', '§25', '§1', '§1', '§25', '§25', '§7206', '§6701', '§25', '§25', '§30', '§179', '§30', '§30', '§30', '§30', '§168', '§121', '§40', '§4083', 'art 1', '§1', '§1', '§1', '§1', '§1', '§1', '§179', '§1', '§1', '§1', '§1', '§6001', '§6001', '§30', '§30']

IRS Reminds Taxpayers of Tax Savings from Implementing Energy Conservation Measures and Creating New Energy Sources (IR-2009-44; FS-2009-10; Notice 2009-41; TDNR TG-99)
The IRS has released three pieces of guidance regarding energy credits that are available to both individuals and businesses.
IR-2009-44
The IRS has reminded taxpayers of new tax benefits, enacted as part of the American Recovery and Reinvestment Tax Act of 2009 (P.L. 111-5), that are available to individuals and businesses that reduce energy use or to producers that create new energy sources. Taxpayers are encouraged to examine the new tax benefits and determine whether they qualify to claim the energy credit.
Tax credits for energy-efficient improvements or installing alternative energy equipment have been increased and are available to homeowners. Homeowners seeking to claim these credits may rely, temporarily, on existing manufacturer certifications or Energy Star labels in determining which products are qualified until updated certification guidelines are announced within the next several months.
In addition, under provisions relevant to energy producers, taxpayers who place in service facilities that produce electricity from wind or other renewable resources can choose either the energy investment tax credit, the renewable electricity production tax credit, or a grant from the Treasury Department.
FS-2009-10
The IRS has issued a fact sheet summarizing the provisions of the Act that provide new, extended, or increased incentives for taxpayers' efforts to increase energy efficiency. The most in-depth discussion focuses on the residential energy property credit under Code Sec. 25C(a)(2). The credit is available for improvements including the addition of insulation, energy-efficient exterior windows, and energy-efficient heating and air conditioning systems.
While a similar credit was available in 2007, some of the requirements for qualifying improvements have been made more stringent. Some property that qualified for the old credit will not qualify for the new one.
Other credits discussed in the fact sheet include the residential energy efficient property credit (Code Sec. 25D), the plug-in electric drive vehicle credit (Code Sec. 30D), the plug-in electric vehicle credit for smaller vehicles (Code Sec. 30), the credit for plug-in electric drive conversion kits (Code Sec. 30B(a)(5)), the alternative motor vehicle credit (Code Sec. 30B), the renewable energy production tax credit (Code Sec. 45), the energy investment credit (Code Sec. 48), and the credit for alternative fuel vehicle refueling property (Code Sec. 30C).
The fact sheet also notes the increases in the volume limits on new clean renewable energy bonds (Code Sec. 54C), and on qualified energy conservation tax credit bonds (Code Sec. 54D), and the opportunity for businesses to obtain renewable energy grants in place of the energy investment credit or the renewable energy production credit (Code Sec. 48(d)).
The IRS has provided interim guidance relating to the credit provided for residential energy-efficient property under Code Sec. 25D placed in service for tax years beginning after December 31, 2008, and before January 1, 2017.
The P.L. 111-5 amended Code Sec. 25D to set the applicable amount of a taxpayer's credit for expenditures on qualified solar electric property, qualified solar water-heating property; qualified fuel cell property; qualified small wind energy property; and qualified geothermal heat pump property. The credit extends to labor costs for site preparation, assembly, original installation and piping or wiring to connect the property to the dwelling.
Manufacturers may certify to purchasers that the property meets the requirements necessary for claiming the credit under Code Sec. 25D. A certification statement may be packaged with the property, provided in a printable form on the manufacturer's website or in any other manner that permits the taxpayer to retain the certification statement for recordkeeping purposes. Certification statements must contain the name and address of the manufacturer, identification of the property as qualified property mentioned above, and appropriate identifiers of the property.
Additionally, a certification statement must contain a declaration, signed by an individual currently authorized to bind the manufacturer. The guidance identifies the information that must be provided in the certification statement. The manufacturer may provide optional information including descriptions of the property and energy savings capacity. Specifically, for geothermal heat pump property, the manufacturer can state that the property meets the requirements of the Energy Star program.
IR-2009-44 April 23, 2009
Tax credits : Energy credit : Qualification for credit .
WASHINGTON --The Internal Revenue Service today reminded individual and business taxpayers that many energy-saving steps taken this year may result in bigger tax savings next year.
The IRS encouraged individuals and businesses to explore whether they are eligible for any of the new energy tax provisions. More information on the wide range of energy items is available on the special Recovery section of IRS.gov. For a larger listing of ARRA's energy-related tax benefits, see Fact Sheet 2009-10 .
The new law also eliminates the cap on the 30 percent tax credit for alternative energy equipment, such as solar water heaters, geothermal heat pumps and small wind turbines, installed in a home. The cap generally has been eliminated for these improvements beginning in the 2009 tax year. The IRS today issued Notice 2009-41 , which explains the effects of this change.
For more information on the renewable electricity production tax credit under Section 45 see Notice 2008-60 and Notice 2008-48 , and for more information on the energy investment tax credit under Section 48 see Notice 2008-68 .
FS-2009-10 April 23, 2009
Credits : Residential energy property credit : Residential energy efficient property credit : Plug-in electric drive vehicle credit : Plug-in electric vehicle credit : Plug-in electric drive conversion kits : Alternative motor vehicle credit : New clean renewable energy bonds : Qualified energy conservation bonds : Renewable energy production tax credit : Investment credit : Renewable energy property credit : Renewable energy grants : Alternative fuel vehicle refueling property credit : Fact sheet .
Residential Energy Property Credit ( Section 1121 ): The new law increases the energy tax credit for homeowners who make energy efficient improvements to their existing homes. The new law increases the credit rate to 30 percent of the cost of all qualifying improvements and raises the maximum credit limit to $1,500 for improvements placed in service in 2009 and 2010.
A similar credit was available for 2007, but was not available in 2008. Homeowners should be aware that the standards in the new law are higher than the standards for the credit that was available in 2007 for products that qualify as "energy efficient" for purposes of this tax credit. The IRS will issue guidance that will allow manufacturers to certify that their products meet these new standards.
Until the guidance is released, homeowners generally may continue to rely on manufacturers' certifications that were provided under the old guidance. For exterior windows and skylights, homeowners may continue to rely on Energy Star labels in determining whether property purchased before June 1, 2009, qualifies for the credit. Manufacturers should not continue to provide certifications for property that fails to meet the new standards.
Residential Energy Efficient Property Credit ( Section 1122 ): This nonrefundable energy tax credit will help individual taxpayers pay for qualified residential alternative energy equipment, such as solar hot water heaters, geothermal heat pumps and wind turbines. The new law removes some of the previously imposed maximum amounts and allows for a credit equal to 30 percent of the cost of qualified property. See Notice 09-41 .
Plug-in Electric Drive Vehicle Credit ( Section 1141 ): The new law modifies the credit for qualified plug-in electric drive vehicles purchased after Dec. 31, 2009. To qualify, vehicles must be newly purchased, have four or more wheels, have a gross vehicle weight rating of less than 14,000 pounds, and draw propulsion using a battery with at least four kilowatt hours that can be recharged from an external source of electricity. The minimum amount of the credit for qualified plug-in electric drive vehicles is $2,500 and the credit tops out at $7,500, depending on the battery capacity. The full amount of the credit will be reduced with respect to a manufacturer's vehicles after the manufacturer has sold at least 200,000 vehicles.
Plug-In Electric Vehicle Credit ( Section 1142 ): The new law also creates a special tax credit for certain low-speed electric vehicles (including those with two and three wheels). The amount of the credit is 10 percent of the cost of the vehicle, up to a maximum credit of $2,500 for purchases made after Feb. 17, 2009, and before Jan. 1, 2012. To qualify, a vehicle must be either a low speed vehicle propelled by an electric motor that draws electricity from a battery with a capacity of 4 kilowatt hours or more or be a two- or three-wheeled vehicle propelled by an electric motor that draws electricity from a battery with the capacity of 2.5 kilowatt hours. A taxpayer may not claim this credit if the plug-in electric drive vehicle credit is allowable.
Conversion Kits ( Section 1143 ): The new law also provided a tax credit for plug-in electric drive conversion kits. The credit is equal to 10 percent of the cost of converting a vehicle to a qualified plug-in electric drive motor vehicle and placed in service after Feb. 17, 2009. The maximum amount of the credit is $4,000. The credit does not apply to conversions made after Dec. 31, 2011. A taxpayer may claim this credit even if the taxpayer claimed a hybrid vehicle credit for the same vehicle in an earlier year.
Treatment of Alternative Motor Vehicle Credit as a Personal Credit Allowed Against AMT ( Section 1144 ): Starting in 2009, the new law allows the Alternative Motor Vehicle Credit, including the tax credit for purchasing hybrid vehicles, to be applied against the Alternative Minimum Tax. Prior to the new law, the Alternative Motor Vehicle Credit could not be used to offset the AMT. This means the credit could not be taken if a taxpayer owed AMT or was reduced for some taxpayers who did not owe AMT.
New Clean Renewable Energy Bonds ( Section 1111 ): The new law increases the amount of funds available to issue new clean renewable energy bonds from the one-time national limit of $800 million to $2.4 billion. These qualified tax credit bonds can be issued to finance certain types of facilities that generate electricity from renewable sources (for example, wind and solar).
Qualified Energy Conservation Bonds ( Section 1112 ): The new law increases the amount of funds available to issue qualified energy conservation bonds from the one-time national limit of $800 million to $3.2 billion. These qualified tax credit bonds can be issued to finance governmental programs to reduce greenhouse gas emissions and other conservation purposes.
Extension of Renewable Energy Production Tax Credit ( Section 1101 ): The new law generally extends the "eligibility dates" of a tax credit for facilities producing electricity from wind, closed-loop biomass, open-loop biomass, geothermal energy, municipal solid waste, qualified hydropower and marine and hydrokinetic renewable energy. The new law extends the "placed in service date" for wind facilities to Dec. 31, 2012. For the other facilities, the placed-in-service date was extended from December 31, 2010 (December 31, 2011 in the case of marine and hydrokinetic renewable energy facilities) to Dec. 31, 2013.
Election of Investment Credit in Lieu of Production Credit ( Section 1102 ): Businesses who place in service facilities that produce electricity from wind and some other renewable resources after Dec 31, 2008 can choose either the energy investment tax credit, which generally provides a 30 percent tax credit for investments in energy projects or the production tax credit, which can provide a credit of up to 2.1 cents per kilowatt-hour for electricity produced from renewable sources. A business may not claim both credits for the same facility.
Repeal of Certain Limits on Business Credits for Renewable Energy Property ( Section 1103 ): The new law repeals the $4,000 limit on the 30 percent tax credit for small wind energy property and the limitation on property financed by subsidized energy financing. The repeal applies to property placed in service after Dec. 31, 2008.
Coordination With Renewable Energy Grants ( Section 1104 ): Business taxpayers also can apply for a grant instead of claiming either the energy investment tax credit or the renewable energy production tax credit for property placed in service in 2009 or 2010. In some cases, if construction begins in 2009 or 2010, the grant can be claimed for energy investment credit property placed in service through 2016, and for qualified renewable energy facilities, the grant is 30 percent of the investment in the facility and the property must be placed in service before 2014 (2013 for wind facilities).
Temporary Increase in Credit for Alternative Fuel Vehicle Refueling Property ( Section 1123 ): The new law modifies the credit rate and limit amounts for property placed in service in 2009 and 2010. Qualified property (other than property relating to hydrogen) is now eligible for a 50 percent credit, and the per-location limit increases to $50,000 for business property (increases to $2,000 for other/residential locations). Property relating to hydrogen keeps the 30 percent rate as before, but the per-business location limit rises to $200,000.
Code Sec. 25D
Credits : Residential property : Alternative energy property .
This notice sets forth interim guidance, pending the issuance of regulations, relating to the credit for residential energy efficient property under §25D of the Internal Revenue Code for taxable years beginning after December 31, 2008. Specifically, this notice provides procedures that manufacturers may follow to certify that property satisfies certain conditions of §25D , as well as guidance regarding the conditions under which taxpayers seeking to claim the §25D credit may rely on a manufacturer's certification. The Internal Revenue Service (Service) and the Treasury Department expect that the regulations will incorporate the rules set forth in this notice.
.01 Section 25D provides a tax credit to individuals for residential energy efficient property. Section 1122 of Division B of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5, amended section 25D for taxable years beginning after December 31, 2008. The amount of a taxpayer's section 25D credit for a taxable year beginning after December 31, 2008, is equal to the sum of the following:
(3) The lesser of --
.01 Meaning of Terms .
(e) Qualified geothermal heat pump property expenditures are expenditures for equipment which uses the ground or ground water as a thermal energy source to heat the dwelling unit or as a thermal energy sink to cool the dwelling unit, meets the requirements of the Energy Star program which are in effect at the time that the expenditure for such equipment is actually made (even if under §25D(e)(8) the expenditure is deemed made at a later time for purposes of determining the taxable year for which a taxpayer may claim the credit), and is installed on or in connection with a qualifying dwelling unit.
(2) Qualifying Dwelling Unit .
(b) For purposes of section 3.01(1)(c) of this notice (relating to qualified fuel cell property expenditures), a qualifying dwelling unit is a dwelling unit that is located in the United States and is used as a principal residence (within the meaning of section 121 ) by the taxpayer.
.02 Manufacturer's Certification
(1) In General . The manufacturer of property may certify to a taxpayer that the property meets certain requirements that must be satisfied to claim the credit under §25D by providing the taxpayer with a certification statement that satisfies the requirements of section 3.02(3) , (4) and (5) of this notice. The manufacturer may provide the certification statement by including a written copy of the statement with the packaging of the property, in printable form on the manufacturer's website, or in any other manner that will permit the taxpayer to retain the certification statement for tax recordkeeping purposes.
(2) Taxpayer Reliance . Except as provided in section 3.02(7) of this notice, a taxpayer may rely on a manufacturer's certification in determining whether property is eligible for the credit under §25D . A taxpayer is not required to attach the certification statement to the return on which the credit is claimed. However, §1.6001-1(a) of the Income Tax Regulations requires that taxpayers maintain such books and records as are sufficient to establish the entitlement to, and amount of, any credit claimed by the taxpayer. Accordingly, a taxpayer claiming a credit for residential energy efficient property should retain the certification statement as part of the taxpayer's records for purposes of §1.6001-1(a) .
(3) Content of Manufacturer's Certification; Required Information . A manufacturer's certification statement must contain the following:
(4) Content of Manufacturer's Certification; Optional Information . A manufacturer's certification statement may contain any of the following statements that are applicable:
(5) Content of Manufacturer's Certification; Required Declaration . A manufacturer's certification statement must contain a declaration, signed by a person currently authorized to bind the manufacturer in these matters, in the following form:
"Under penalties of perjury, I declare that I have examined this certification statement, and to the best of my knowledge and belief, the facts presented are true, correct, and complete."
(6) Manufacturer's Records . A manufacturer that certifies to a taxpayer that a property meets a requirement that must be satisfied to claim the credit under §25D must retain in its records documentation establishing that the property meets the requirement. The manufacturer must, upon request, make such documentation available for inspection by the Service.
(7) Effect of Erroneous Certification or Failure to Satisfy Documentation Requirements . The Service may, upon examination (and after any appropriate consultation with the Department of Energy or the Environmental Protection Agency), determine that a manufacturer's certification that property meets a requirement that must be satisfied to claim the credit under §25D is erroneous. In that event, or if the property's manufacturer fails to satisfy the requirements relating to documentation in section 3.02(6) of this notice, the manufacturer's right to provide a certification on which future purchasers of the property can rely will be withdrawn, and taxpayers purchasing the property after the date on which the Service publishes an announcement of the withdrawal may not rely on the manufacturer's certification. Taxpayers may continue to rely on the certification for properties purchased on or before the date on which the announcement of the withdrawal is published (including in cases in which the property is not installed or the credit is not claimed before the announcement of the withdrawal is published). Manufacturers are reminded that an erroneous certification may result in the imposition of penalties --
(a) Under §7206 for fraud and making false statements; and
(b) Under §6701 for aiding and abetting an understatement of tax liability (in the amount of $1,000 per return on which a credit is claimed in reliance on the certification).
.03 Additional Requirements . A taxpayer claiming a credit with respect to an expenditure is responsible for determining whether the expenditure appropriately relates to a qualifying dwelling unit (within the meaning of section 3.01(2) of this notice) and cannot rely on a manufacturer's certification for that purpose.
.04 Labor Costs . Section 25D allows the credit for expenditures for labor costs properly allocable to the onsite preparation, assembly, or original installation of residential energy efficient property described in section 3.01 of this notice and for piping or wiring to interconnect such property to the dwelling unit.
.01 If a dwelling unit is jointly occupied and used during any calendar year as a residence by two or more individuals, then the maximum amount of qualified fuel cell expenditures which may be taken into account for purposes of §25D(a) by all individuals with respect to the dwelling unit during the calendar year is $1,667 for each half kilowatt of capacity of the fuel cell power plant to which such expenditures relate.
.02 The amount of expenditures taken into account under section 4.01 of this notice by any individual for a taxable year is equal to the lesser of --
(2) The maximum amount of expenditures that may be taken into account by all individuals under section 4.01 of this notice multiplied by a fraction --
The collection of information in this notice is in section 3 . This information is required to be collected and retained in order to ensure that property meets the requirements for the residential energy efficient property credit under §25D . This information will be used to determine whether the property for which manufacturers provide certifications is property that qualifies for the credit. The collection of information is required to obtain a benefit from manufacturers' certification statements that property meets certain requirements that must be satisfied to qualify for the credit. The likely respondents are corporations, partnerships, and individuals.
The principal author of this notice is Martha S. McRee of the Office of Associate Chief Counsel (Passthroughs & Special Industries). For further information regarding this notice contact Martha S. McRee at (202) 622-3110 (not a toll-free call).
Treasury Department News Release, Treasury Celebrates Earth Day with 13 Energy Tax Credits, Bonds and a New Grant Program, TDNR TG-99
Treasury Department news release : Earth Day 2009 : Energy tax credits : Grants . --
Treasury Celebrates Earth Day with 13 Energy Tax Credits, Bonds and a New Grant Program
Increased Tax Credits for Making Energy Efficiency Home Improvements
WASHINGTON - In confronting the most severe financial crisis in generations, the Obama Administration has focused simultaneously on helping Americans save money while investing in our nation's economic future. To that end and in celebration of Earth Day, the Treasury Department and the Internal Revenue Service (IRS) are highlighting today 13 new or expanded energy incentives under the Administration's American Recovery and Reinvestment Act of 2009 that provide innovative ways for businesses and consumers to save money while greening America. Also today, Treasury and the IRS are providing a transition safe harbor for consumers and businesses, necessary because of the Recovery Act's increase in energy efficiency standards for home energy saving improvements.
Due to the Recovery Act, homeowners can now claim larger tax credits for installing alternative energy equipment, as the new law eliminates limits on the credits that can be claimed for solar water heaters, wind turbines, and geothermal heat pumps. The Act also provides for a credit of 30 percent of the cost of certain home energy-saving improvements, such as adding insulation, energy-efficient exterior windows, and energy-efficient heating and air conditioning systems. Homeowners can now claim up to $1,500 of these credits during 2009 and 2010, instead of the $500 lifetime limit under the old law.
"These new or expanded energy incentives do two critical things: they increase savings for Americans and they help protect the environment," said Treasury Secretary Timothy Geithner. "From day one, this Administration has pursued every option to help ordinary Americans. The 13 energy incentives in the Recovery Act provide $12.7 billion in renewable energy and energy efficiency incentives. These incentives will lead to an increase in jobs at energy-specific businesses, investment in our long-term energy needs, and protect our environment. Those are results we should applaud on Earth Day and throughout the calendar year."
Importantly, through the safe harbor, homeowners can rely on existing manufacturer certifications or appropriate Energy Star labels when seeking to take advantage of the Recovery Act tax credit by purchasing qualifying products until June 1, 2009, and businesses can thus continue to move existing inventory off their shelves.
Andersen Windows of Bayport, Minnesota has now recalled nearly half - 250 of the 560 - workers it laid off in January - a move made possible in part by the tax credit for energy efficient home improvements. Andersen Windows also cites the first-time homebuyer credit as another factor, as this tax credit helps to get existing homes off the market so that builders can start building again.
The 13 energy incentives highlighted today focus on areas as diverse as electric car plug-ins and incentives for businesses to produce electricity from wind energy projects. For more information on these provisions click here or visit IRS.gov.
Credit for Installation of Alternative Fueling Stations: Administrative guidance
The IRS issued interim guidance in Notice 2007-43 with respect to the new qualified alternative fuel vehicle (QAFV) refueling property credit. The credit was added by the Energy Tax Incentives Act of 2005 (P.L. 109-58). The guidance is effective for the period that the credit is effective, that is for property placed in service as QAFV refueling property after December 31, 2005, and on or before December 31, 2009 (December 31, 2014, in the case of property relating to hydrogen). The guidance provides a set of definitions for terms used in Code Sec. 30C, as well as cross-references to existing regulations for defining concepts, such as placed in service. The guidance also provides rules for the computation of the credit and for the treatment of converted and dual-use property, as well as examples to illustrate the rules.
[Full Text --Notice 2007-43]
This notice sets forth interim guidance, pending the issuance of regulations, relating to the new qualified alternative fuel vehicle (QAFV) refueling property credit ("Refueling Property Credit") under §30C of the Internal Revenue Code. The Internal Revenue Service and the Treasury Department expect that the regulations will incorporate the rules set forth in this notice.
Section 30C provides a credit for QAFV refueling property. Section 30C(c)(1) provides that QAFV refueling property has the same meaning as under §179A(d) (relating to the deduction allowed for qualified clean-fuel vehicle refueling property placed in service before January 1, 2006) but only with respect to the alternative fuels listed in §30C(c)(1). The credit is available for property that the taxpayer places in service as QAFV refueling property after December 31, 2005, and on or before December 31, 2009 (December 31, 2014, in the case of property relating to hydrogen).
This notice provides guidance relating to the computation of the Refueling Property Credit and the treatment for purposes of the credit of converted and dual-use refueling property. This notice does not address: (1) the rule under §30C(d)(2) preventing the credit from being used to reduce alternative minimum tax liability; or (2) the rule under §30C(e)(5) requiring recapture of the credit under certain circumstances. The Internal Revenue Service and Treasury Department expect to issue separate guidance relating to these, and other, issues under §30C.
SECTION 4. DEFINITIONS AND CROSS REFERENCES TO APPLICABLE REGULATIONS
(1) QAFV refueling property. QAFV refueling property is any property (other than a building or its structural components) that meets the following requirements:
(i) The property is not used predominantly outside the United States (or, in the case of property described in §168(g)(4)(G), is property used predominantly in a U.S. possession).
(ii) The property is of a character subject to the allowance for depreciation or is installed on property that is used as the taxpayer's principal residence (within the meaning of §121)).
(iii) The original use of the property begins with the taxpayer.
(iv) The property is used for --
(a) Storing alternative fuel at the point where the fuel is delivered into the fuel tank of a motor vehicle that is propelled by such fuel; or
(b) Dispensing alternative fuel at such point into the fuel tank of a motor vehicle that is propelled by such fuel.
(2) Dual-use property. Dual-use property is refueling property that is used --
(a) To store and/or dispense both alternative fuel and conventional fuel; or
(b) Both to store alternative fuel that is dispensed into the fuel tanks of motor vehicles at the location of the storage facility and to store alternative fuel that is transported to other locations.
(3) Alternative fuel. A fuel is an alternative fuel if --
(i) At least 85 percent of its volume consists of one or more of the following: ethanol, natural gas, compressed natural gas, liquefied natural gas, liquefied petroleum gas, or hydrogen; or
(ii) It is a qualifying biodiesel mixture.
(4) Qualifying biodiesel mixture. A fuel is a qualifying biodiesel mixture if it is a mixture of biodiesel (as defined in §40A(d)(1)) and diesel fuel (as defined in §4083(a)(3)) and the mixture contains at least 20 percent biodiesel. For this purpose, any kerosene in a mixture --
(ii) Is taken into account in determining whether the mixture contains at least 20 percent biodiesel.
(5) Conventional fuel. Conventional fuel is any fuel that is not an alternative fuel. Conventional fuel includes diesel fuel that is not in a qualifying biodiesel mixture and gasoline.
(6) Conventional refueling property. Conventional refueling property is property that is used to dispense or store only conventional fuel.
(7) Fuel tank. The fuel tank of a motor vehicle that is propelled by alternative fuel includes only the tank that supplies fuel to the propulsion engine of the vehicle.
.02 Cross References to Applicable Regulations. The following provisions of the Income Tax Regulations (26 CFR Part 1) apply for purposes of this notice:
(1) Building and structural components. Whether property is a building or a structural component of a building is determined under the principles of §1.48-1(e).
(2) Original use. Whether the original use of property begins with the taxpayer is determined under the principles of §1.48-2.
(3) Placed in service. The year in which property is placed in service and whether the property is placed in service as QAFV refueling property are determined under the principles of §1.46-3(d).
(4) Subject to allowance for depreciation. Whether property is of a character subject to the allowance for depreciation is determined under the principles of §1.48-1(b).
(5) Use outside the United States. Whether property is used predominantly outside the United States is determined under the principles of §1.48-1(g).
SECTION 5. COMPUTATION OF CREDIT
.01 In General. The Refueling Property Credit is equal to 30 percent of the cost of any property that the taxpayer places in service as QAFV refueling property during the taxable year. The credit is limited to $30,000 per property for property of a character subject to the allowance for depreciation and $1,000 per property for other property. (A proposed technical correction would retroactively change this rule so that a single limitation of $30,000 or $1,000 (depending on whether the property is of a character subject to the allowance for depreciation) applies to all QAFV refueling property placed in service at a location during a taxable year.)
.02 Cost of QAFV Refueling Property. The cost of QAFV refueling property is determined under the principles of §1.46-3(a) and (c) and the following rules:
(1) The cost of QAFV refueling property includes all costs that are required under federal tax principles to be capitalized as a cost of the QAFV refueling property. These costs include the cost of acquiring or constructing the QAFV refueling property or of converting conventional refueling property into QAFV refueling property.
(2) The cost of QAFV refueling property does not include costs that are properly allocable to land or to a building and its structural components. Costs properly allocable to land include, but are not limited to, costs related to the acquisition of land on which the QAFV refueling property is located and expenses for permits, legal fees, project management, or engineering to the extent such expenses are related to the land.
(3) The cost of QAFV refueling property does not include any amount that is taken into account under §179 (relating to the election to expense certain depreciable business assets).
SECTION 6. CONVERTED AND DUAL-USE PROPERTY
.01 Converted Refueling Property.
(1) In general. The rules in this section 6.01 apply solely with respect to converted QAFV refueling property. For this purpose, converted QAFV refueling property is QAFV refueling property that was converted from property (including conventional refueling property) that is not QAFV refueling property (non-QAFV property).
(2) Reconditioned or rebuilt property. If converted QAFV refueling property is treated under the principles of §1.48-2 as reconditioned or rebuilt property, the cost of the QAFV refueling property includes the cost of reconditioning or rebuilding the non-QAFV property, but does not include the basis of the non-QAFV property.
(3) Use as QAFV refueling property treated as original use. If converted QAFV refueling property, including any parts that were non-QAFV property before the conversion, is treated under the principles of §1.48-2 as being put to original use when first used as QAFV refueling property, the cost of the QAFV refueling property includes both the adjusted basis of the non-QAFV property immediately before the conversion and the cost of the conversion.
.02 Dual-Use Property.
(1) In general. In the case of dual-use property that is used to store and/or dispense both alternative fuel and conventional fuel, the cost of the dual-use property is taken into account in computing the Refueling Property Credit only to the extent such cost exceeds the cost of equivalent conventional refueling property. For this purpose, equivalent conventional refueling property is conventional refueling property that is not used to store and/or dispense alternative fuel, but is otherwise comparable to the dual-use property and can store and/or dispense the same amount of conventional fuel as the dual-use property.
(2) Storage facilities. In the case of dual-use property that is used both to store alternative fuel that is dispensed into the fuel tanks of motor vehicles at the location of the storage facility and to store fuel that is transported to other locations, the cost of the dual-use property is taken into account in computing the Refueling Property Credit only to the extent such cost exceeds the cost of a storage facility that is equivalent to the dual-use property except that it is used for the sole purpose of storing alternative fuel that is transported to other locations and can store the same amount of alternative fuel as the dual-use property stores for transport to other locations.
SECTION 7. EXAMPLES
.01 Example 1. (i) X, a fuel wholesaler, acquires an additional storage tank to store alternative fuel at its principal place of business and a fuel tanker truck to transport the alternative fuel from its principal place of business to the retail service stations of X 's customers. The fuel tanker truck dispenses alternative fuel into storage tanks at the retail service stations but is not used to dispense the alternative fuel into the fuel tanks of motor vehicles that are propelled by the alternative fuel.
(ii) Neither the storage tank nor the fuel tanker truck is QAFV refueling property within the meaning of section 4.01(1) of this notice. The storage tank is used to store alternative fuel, but it does not store the fuel at the point where the fuel is delivered into the fuel tank of a motor vehicle that is propelled by alternative fuel within the meaning of section 4.01(7) of this notice. Similarly, the fuel tanker truck is used to dispense alternative fuel, but it does not dispense the fuel into the fuel tank of a motor vehicle that is propelled by alternative fuel.
.02 Example 2. (i) The facts are the same as in Example 1, except that X also acquires a pump that is used to dispense alternative fuel from the storage tank into the fuel tanks of X 's fuel tanker trucks. The storage tank has the same capacity as the tank that would have been used for the sole purpose of storing the alternative fuel that is supplied to X 's customers.
(ii) The pump is QAFV refueling property within the meaning of section 4.01(1) of this notice because it is used to dispense alternative fuel into the fuel tanks of X 's fuel tanker trucks. Accordingly, the cost of the pump is taken into account in determining X 's Refueling Property Credit.
(iii) The storage tank is also QAFV refueling property because it is used to store alternative fuel at the point where the fuel is delivered into the fuel tanks of the fuel tanker trucks. In addition, however, the storage tank is dual-use property described in section 6.02(2). Under section 6.02, the cost of the storage tank is taken into account in computing the Refueling Property Credit only to the extent that cost exceeds the cost of the storage tank that would have been used for the sole purpose of storing the alternative fuel that is supplied to X 's customers. Because no increase in the capacity of the storage tank is needed, none of the storage tank's cost is taken into account in computing the amount of the Refueling Property Credit.
.03 Example 3. (i) Y is a retail seller of gasoline. In Year 1, Y acquires and places in service conventional refueling property consisting of a gasoline storage tank. Y claims the allowable depreciation deduction with respect to the gasoline storage tank on its Federal income tax return for Year 1. In Year 2, Y incurs costs of $10,000 to convert the gasoline storage tank into an alternative fuel storage tank and begins using the converted property as QAFV refueling property.
(ii) If, under the principles of §1.48-2, the storage tank is treated as reconditioned or rebuilt property, only the $10,000 incurred to convert the gasoline tank into QAFV refueling property is taken into account for purposes of determining Y 's Refueling Property Credit for Year 2. If, on the other hand, the converted storage tank is treated, under the principles of §1.48-2, as being put to original use when first used as QAFV refueling property, the adjusted basis of the storage tank immediately before its conversion into QAFV refueling property also is taken into account for purposes of determining the credit.
SECTION 8. RECORDKEEPING
Section 6001 provides that every person liable for any tax imposed by the Code, or for the collection thereof, must keep such records, render such statements, make such returns, and comply with such rules and regulations as the Secretary may from time to time prescribe. The books and records required by §6001 must be kept at all times available for inspection by authorized internal revenue officers or employees, and must be retained so long as the contents thereof may become material in the administration of any internal revenue law. Section 1.6001-1(e) of the Procedure and Administration Regulations. In order to satisfy the recordkeeping requirements of §6001 and the regulations thereunder, a taxpayer that claims the Refueling Property Credit must retain adequate books and records so that, for any taxable year, it can be verified from those books and records that the fuel that is dispensed and/or stored meets the definition of alternative fuel contained in §30C(c)(1)(A) or (B) and section 4.01(2) of this notice, and that the refueling property otherwise meets the requirements of §30C and this notice.
This notice is effective for QAFV refueling property placed in service after December 31, 2005, and on or before December 31, 2009 (December 31, 2014, in the case of property relating to hydrogen).
IRS Notice 2007-43, I.R.B. 2007-22.
Plug-in Electric Vehicle Credit: Synopsis - plug-in electric vehicle credit
A new credit against tax applies for qualified plug-in electric drive motor vehicles placed in service in 2009. The credit is equal to the applicable amount for each new qualified plug-in electric drive motor vehicle placed in service by the taxpayer during 2009 ( Code Sec. 30D(a), as added by the Emergency Economic Stabilization Act of 2008 ( P.L. 110-343)). The applicable amount is the sum of $2,500, plus an additional $417 for each kilowatt hour of traction battery capacity in excess of four kilowatt hours ( Code Sec. 30D(a)(2), as added by P.L. 110-343). This credit was scheduled to terminate after 2014, however, the American Recovery and Reinvestment Tax Act of 2009 ( P.L. 111-5) overhauls the qualified plug-in electric drive motor vehicle credit, effective for vehicles placed in service after 2009, and makes the credit permanent ( Code Sec. 30D, as amended by P.L. 111-5). The credit for each new qualified plug-in electric drive motor vehicle placed in service by the taxpayer in the tax year after 2009 is equal to the sum of $2,500, and $417 for a vehicle drawing propulsion energy from a battery with at least 5 kilowatt hours of capacity plus $417 for each additional kilowatt hour of capacity in excess of 5 kilowatt hours, up to a maximum aggregate of $5,000 based on kilowatt hour capacity ( Code Sec. 30D(a) and (b), as amended by P.L. 111-5
Generally, the plug-in electric vehicle credit rules are very similar to the rules that apply to the Code Sec. 30B alternative motor vehicle credit. There are credit limits, a credit phaseout, specific requirements applicable to the vehicle, as well as special rules for basis reduction and to prevent a double tax benefit.
This new credit may be claimed by both business and individual taxpayers. The use of placed-in-service language may again cause some confusion for individual taxpayers. When the alternative motor vehicle credit was established, the issue arose as to what date the IRS would consider the placed-in-service date for individuals. Although no pronouncement was every made, the language used in other official announcements led practitioners to conclude that the date of purchase was the placed-in-service date for individuals. It seems that the same placed-in-service date would apply for the new credit.
Electricity Produced from Certain Renewable Resources: Wind energy
A safe harbor is established under which the IRS will respect the allocation of the Code Sec. 45 wind energy production tax credits by partnerships in accordance with Code Sec. 704(b). The IRS intends for the Safe Harbor to simplify the application of Code Sec. 45 to partners and partnerships that own and produce electricity from qualified wind energy facilities.
Rev. Proc. 2007-65, I.R.B. 2007-50, November 21, 2007, as revised by Announcement 2007-112, I.R.B. 2007-50, 1175, December 7, 2007.
Energy Credit: Energy Credit: Performance standards
If no quality and performance standards are in effect at the time of acquisition of business energy property, the property will not have to meet any such standards issued at a later date.
IR-2134, June 8, 1979, 79(10)
Qualifying Advanced Energy Project Credit: Synopsis - credit for qualifying advanced energy projects
A tax credit is allowed for investment in qualifying advanced energy projects. The credit is equal to 30 percent of a taxpayer's qualified investment for the tax year with respect to any qualifying advanced energy project ( Code Sec. 48C(a), added by the American Recovery and Reinvestment Tax Act of 2009 ( P.L. 111-5)).
The credit is part of the investment credit (see ¶4580.01 et seq.) and the basis of any property that is part of a qualifying advanced energy project is included in the credit base for purposes of applying the investment credit at-risk limitation rules under Code Sec. 49 (see ¶4751.01 et seq.) ( Code Secs. 46(5) and 49(a)(1)(C)(v), added by P.L. 111-5).
The credit is not allowed for any qualified investment for which any of the following credits are allowed: (1) the Code Sec. 48 energy credit (see ¶4671.01 et seq.),(2) the qualifying advanced coal project credit under Code Sec. 48A ( ¶4675.01 et seq.), or (3) the Code Sec. 48B qualifying gasification project credit (see ¶4680.01 et seq.) ( Code Sec. 48C(e), added by P.L. 111-5).
For purposes of the credit, a qualified investment for any tax year is the basis of any eligible property placed in service during that tax year that is part of a qualifying advanced energy project ( Code Sec. 48C(b), added by P.L. 111-5). A qualifying advanced energy project is a project that reequips, expands, or establishes a manufacturing facility for the production of certain types of advanced energy property ( Code Sec. 48C(c), added by P.L. 111-5). See ¶4695.021 for a discussion of a qualified investment and a qualifying advanced energy project.
The credit is available only for qualifying projects certified by the IRS under a qualifying advanced energy project program established in consultation with the Secretary of Energy ( Code Sec. 48C(d), as added by P.L. 111-5). See ¶4695.03 for a discussion of the certification procedure under the qualifying advanced energy project program.
The credit applies to periods after February 17, 2009, under rules similar to the transitional rules of Code Sec. 48(m) (as in effect on the day before October 30, 1990, the date of enactment of the Revenue Reconciliation Act of 1990 ( P.L. 101-508)) (Act Sec. 1302(d) of P.L. 111-5). See ¶4695.06 for a further discussion of the effective date and transitional rules.
New CREBs: Taxpayers affected
New clean renewable energy bonds (New CREBs) can be issued by public power providers, cooperative electric companies, governmental bodies, clean renewable energy bond lenders, and not-for-profit electric utilities that have received a loan or loan guarantee under the Rural Electrification Act ( Code Sec. 54C(d)(6)).
Energy Conservation Bonds: Synopsis - credit for qualified energy conservation bonds
The Emergency Economic Stabilization Act of 2008 ( P.L. 110-343) authorized the issuance of $800 million worth of a new type of tax credit bond called qualified energy conservation bonds. The American Recovery and Reinvestment Tax Act of 2009 ( P.L. 111-5) increased the $800-million limit by $2.4 billion to $3.2 billion ( Code Sec. 54D(d), as amended by P.L. 111-5). These tax credit bonds provide a federal subsidy to assist state and local governments in financing the expenses of a laundry list of energy conservation projects, including capital expenditures, research expenditures, expenses for mass commuting facilities, demonstration projects and public education campaigns.
In general, holders of tax credit bonds are entitled to an annual tax credit calculated by multiplying the outstanding face amount of the bonds held by the applicable credit rate, which is set by the IRS. The credit rate is set so that the bonds can be issued at face value with no interest. For qualified energy conservation bonds, however, the annual tax credit is limited to 70 percent of the face amount times the applicable credit rate ( Code Sec. 54D(b)).
The provisions of Code Sec. 54A, which provide mechanical rules for multiple types of tax credit bonds, apply to qualified energy conservation bonds ( Code Sec. 54A(d)(1) and (d)(2)(C)). See ¶4888.01 et seq.
For a discussion of the requirements for qualified bonds, see ¶4908.021. For a discussion of issuers, see ¶4908.03. Allocations of the bond volume cap are discussed at ¶4908.033. Qualified conservation purposes are discussed at ¶4908.035.
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Labels: Energy Conservation Benefits