Newsletters

Proposed Regs Detail Election to Transfer Eligible Tax Credits, NPRM REG-101610-23

Proposed regulations describe rules for an eligible taxpayer to make the Code Sec. 6418 election to transfer eligible credits to an unrelated person. In particular, the proposed regs:

The regs are proposed to apply to tax years ending on or after the date they are published in the Federal Register as final. However, taxpayers may rely on the proposed regs before that date, provided the taxpayers follow the proposed regulations in their entirety and in a consistent manner with respect to all elections made.

Comments are requested.

Definitions

The proposed regs would define several relevant terms, including eligible taxpayer, eligible credit, paid in cash, specified credit portion, transferred specified credit portion, transfer election, transferee taxpayer, transferee partnership, transferee S corporation, transferor partnership, and transferor S corporation. The regs would also modify the definition of eligible credit property for several of the eligible credits.

Making the Transfer Election

The proposed regs describe the general requirements for making a transfer election, including clarifying when a transfer election can be made in certain ownership situations, situations where no transfer election may be made, the manner and due date for the election, limitations related to a transfer election, the determination of an eligible credit, payments related to a transfer of eligible credits, and a transferred specified credit portion by the transferee taxpayer.

Partnerships and S Corporations

The proposed regs provide several detailed rules for transfers of eligible credits by transferor partnerships and S corporations; and for purchase of eligible credits by transferee partnerships and S corporations. The regs also provide special recapture rules and election rules for these pass-through entities.

Registration

The proposed regs require eligible taxpayers to register before filing the return on which a transfer election is made, and provide information related to each eligible credit property for which the eligible taxpayer intends to transfer a specified credit portion. After the registration process is completed, an eligible taxpayer will receive a unique registration number from the IRS for each registered eligible credit property for which the eligible taxpayer intends to transfer a specified credit portion. An eligible taxpayer that does not obtain and report the registration number is ineligible to make a transfer election.

These registration rules are identical to temporary regulations provided in T.D. 9975. The IRS intends for the pre-filing registration process to occur through an IRS electronic portal.

Special Rules

Finally, the proposed regs would provide special rules relating to the determination of an excessive credit transfer, reasonable cause for a transferee taxpayer, the difference between an excessive credit transfer and recapture, the mechanics for basis reduction and recapture notification, rules for ineffective elections, and rules for the carryback and carryforward of transferred eligible credits.

Comments Requested

The IRS requests comments on the proposed regulations. Comments may be submitted by mail or via the Federal eRulemaking Portal at https://www.regulations.gov (indicate IRS and REG-101610-23). All comments must be received by August 14, 2023. A public hearing is scheduled for August 23, 2023.

FL - Gas and Sulfur production tax rates for 2024-2025 announced

Florida has issued the severance tax rates for the production of gas and sulfur effective July 1, 2024, through June […]

Read More
FL - Gas and Sulfur production tax rates for 2024-2025 announced

No Further Funding Cuts For IRS In FY24

Other than a planned repurposing of Inflation Reduction Act supplemental funding, the Internal Revenue Service saw no other cuts as the President signed off on the resolution […]

Read More
No Further Funding Cuts For IRS In FY24

Energy Efficient Property and Improvement Rebate Guidance Issued, Announcement 2024-19; IR-2024-97

The IRS has issued an announcement that addresses the federal income tax treatment of amounts paid for the purchase of energy efficient property and improvements. Taxpayers who […]

Read More
Energy Efficient Property and Improvement Rebate Guidance Issued, Announcement 2024-19; IR-2024-97

IRS Criminal Investigation Releases COVID Fraud Conviction Statistics, IR-2024-83

The IRS released statistics that showed 1,644 tax and money-laundering cases related to COVID fraud, totaling $9 billion investigated by the Criminal Investigation (CI). CI is the law enforcement […]

Read More
IRS Criminal Investigation Releases COVID Fraud Conviction Statistics, IR-2024-83

IRS Updates FAQ on Commercial Clean Vehicle Credits (FS-2024-14; IR-2024-111)

The IRS updated frequently asked questions (FAQ) on New, Previously Owned and Qualified Commercial Clean Vehicle Credits. These FAQs provide guidance on how the Inflation Reduction […]

Read More
IRS Updates FAQ on Commercial Clean Vehicle Credits (FS-2024-14; IR-2024-111)

2024 Foreign Housing Expense Amounts Released, Notice 2024-31

KPMG TaxNewsFlash – United States March 20, 2024 The IRS today released Notice 2024-31 [PDF 156 KB] providing the adjustments to the limitation on housing expenses, under […]

Read More
2024 Foreign Housing Expense Amounts Released, Notice 2024-31

IRS Releases Major Filing Numbers Showing Service Improvements, IR-2024-109

Reflecting on the 2024 tax filing season, the IRS released major filing numbers for the season. The agency highlighted a variety of improvements that dramatically expanded service for millions of taxpayers during […]

Read More
IRS Releases Major Filing Numbers Showing Service Improvements, IR-2024-109

IRS Wraps Up Dirty Dozen, Warns of Bogus Tax Avoidance Strategies (IR-2024-105)

The IRS has wrapped up the 2024 Dirty Dozen campaign, with a warning to taxpayers to beware of promoters selling bogus tax avoidance strategies. Promoters have been peddling elaborate bogus schemes to […]

Read More
IRS Wraps Up Dirty Dozen, Warns of Bogus Tax Avoidance Strategies (IR-2024-105)

FL - Tax rate on commercial rentals reduced from 4.5% to 2% effective june 1, 2024

Effective June 1, 2024, the Florida sales tax rate imposed on the total rent charged for renting, leasing, letting, or […]

Read More
FL - Tax rate on commercial rentals reduced from 4.5% to 2% effective june 1, 2024

FL - Solid mineral tax rates for 2024 announced

Florida has released the severance tax rates on the production of heavy minerals and other solid minerals for 2024. From […]

Read More
FL - Solid mineral tax rates for 2024 announced