Tax News

CCH (cch.taxgroup.com) reports:

  The IRS has issued guidance for the allocation of Code Sec. 48B credits under the second phase of the qualifying gasification project program (the Phase II gasification program) that was authorized by the Energy Improvement and Extension Act of 2008 (P.L. 110-343). The total amount of credit authorized for the Phase II gasification program is $250 million (the Phase II gasification credit). Applications for certifications to the Department of Energy (DOE) and the IRS may be submitted only during the Phase II application period beginning on March 13, 2009, and ending on March 12, 2012. To be considered in the first allocation round under the Phase II gasification program, applications must be submitted to the DOE on or before November 2, 2009, and to the IRS before March 2, 2010.

 
Code Sec. 48B, as originally enacted, provided for the first phase of the qualifying gasification project program (the Phase I gasification program) and authorized $350 million of credits to be allocated under that program (the Phase I gasification credit). The IRS issued guidance providing the procedures for the credit allocations under the Phase I gasification program (Notice 2006-25, 2006-1 CB 609, as modified and updated by Notice 2007-53, I.R.B. 2007-26, 1474).

  Under those procedures, the entire Phase I gasification credit amount was allocated in two annual allocation rounds. The IRS intends to issue guidance in the future regarding any Phase I gasification credits that are subsequently forfeited. The new guidance for the Phase II gasification program differs from the guidance provided in Notice 2006-25 and Notice 2007-53 for the Phase I gasification program in a number of respects.

  Generally, a taxpayer must submit, for each Phase II gasification project, an application for certification by the DOE and an application for certification by the IRS. Both applications may be submitted only during the Phase II application period beginning on March 13, 2009, and ending on March 12, 2012. The IRS will issue certifications and allocate credits to projects in annual allocation rounds. The first allocation round for Phase II will be conducted in 2009-10. If necessary, additional allocation rounds will be conducted in 2010-11 and 2011-12.

  For the 2009-10 allocation round, the application period for the IRS certification begins on March 13, 2009, and ends on March 1, 2010. The deadline for taxpayers to submit applications for the DOE certification for the 2009-10 allocation round is November 2, 2009. The DOE will rank the projects in descending order and will provide the IRS with the certification and ranking of the projects by March 1, 2010.

  The aggregate amount of the Phase II gasification credit is $250 million, and the certification for a Phase II gasification project cannot apply to more than $650 million of the qualified investment in the project. Thus, the maximum amount of the Phase II gasification credit that will be allocated to a project is $195 million. A taxpayer who was allocated a credit under the Phase I gasification program may resubmit an application for the same project if the project is enhanced to meet the additional requirements for a qualifying project under Phase II.

  The information required to be included in the applications for certification is also provided, along with filing instructions, signature and disclosure requirements, credit allocation and forfeiture rules, definitions of relevant terms and other rules.

 
Notice 2009-23 is effective March 13, 2009. Notice 2007-53 is clarified, modified, and amplified.

Notice 2009-23, 2009FED ¶46,319

Other References:

 
Code Sec. 48B

  CCH Reference - 2009FED ¶4680.021

  CCH Reference - 2009FED ¶4680.15

  Tax Research Consultant

  CCH Reference - TRC BUSEXP: 51,754