TaxNewsFlash-United States

June 7, 2007
No. 2007-237
    
 

Updated Procedures for Allocation of Credits for Qualifying Advanced Coal Project and Qualifying Gasification Project Programs

The IRS today released advance copies of two notices that update procedures with respect to the section 48A credit under the qualifying advance coal project program and the section 48B credit under the qualifying gasification project program.

  • Notice 2007-52 (which is 51 pages) concerns the procedures for the allocation of credits under the qualifying advance coal project program and defines certain terms for purposes of section 48A.
  • Notice 2007-53 (which is 44 pages) provides the procedures for the allocation of credits under the qualifying gasification project program and defines certain terms for purposes of section 48B.

Text of the IRS notices is available by clicking on the hyperlinks, above.

The credits are intended to encourage the development of energy and industrial feedstock sources that will not significantly contribute to air pollution. Under today’s guidance, the U.S. Department of Energy (DOE) will rank a certified project relative to other certified projects, and credits will be allocated to projects based on the DOE rankings. Under the new credit allocation process, up to approximately $650 million of credits will be allocated to projects based on the DOE ranking. The allocation method will substantially favor projects that capture and sequester carbon dioxide emissions and will favor, to a lesser extent, projects optimized for future carbon dioxide capture.

According to a related Treasury Department release (HP-442, June 7, 2007), the notices provide new instructions for applying for the tax credits for advanced coal projects and gasification projects and also allow taxpayers additional time to submit applications for the credits. For the 2007-2008 allocation round, applications for DOE certification are not due to be filed with the Energy Department until October 31, 2007.

 

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