On October 5, 2022, the Department of the Treasury (Treasury) issued a Request for Comments to help it develop guidance on the IRA’s elective payment and advance credit transfer provisions.
For the elective payment provision, the request solicited comments on the definitions of applicable credit and excessive payment, the interaction of these provisions with other Internal Revenue Code provisions, elections by partnerships and S corporations as well as the definition of applicable entity, considerations of the time and manner of elections, elections by government and political subdivisions, the prevention of fraud and duplicate payments, the need for guidance on the excessive payment provisions, the relationship between the IRC section 48D manufacturing credit elective payment provision and the section 6417 elective payment provision, among other topics.
For the credit transfer provision, the request solicited comments on the definitions of eligible credit, eligible taxpayer, and excessive credit transfer; issues with partnership or S corporation transfers; limitations on the transferee taxpayer’s credit eligibility; the determination of the proper taxable year for claiming transferred credits; the interaction of these provisions with other Internal Revenue Code provisions; the prevention of fraud and duplicate payments through documentation; the need for guidance on the excessive payment provisions; credit recapture; and progress expenditures, among other topics.
The deadline to submit initial comments in response to the Request was November 4, 2022.