Ethanol Blog
Federal Lawmakers Push IRS to Act on 45Z Clean Fuels Production Tax Credit
LINCOLN, Neb. (DTN) -- With the clock running out on 2024, two members of the U.S. House of Representatives asked the IRS commissioner to release guidance and to send much-needed documentation to biofuels producers in order for them to claim the 45Z Clean Fuel Production tax credit.
Biodiesel and renewable diesel producers, in particular, are facing a time crunch that could force many production plants to shutter. Those producers were planning to switch to 45Z when the current blenders credit expires at the end of the year, but without IRS guidance and needed registration documents on 45Z those companies are in a bind.
In a letter to IRS Commissioner Danny Werfel on Monday, Reps. Nikki Budzinkski, D-Illinois, and Mike Carey, R-Ohio, asked the IRS to complete the guidance by Jan. 1, 2025.
"Under the law and as made clear in Internal Revenue Service guidance, a taxpayer must have a signed registration letter dated on or before Jan. 1, 2025, to be eligible to claim the Clean Fuel Production Credit," the letter said.
"Importantly, taxpayers may not claim the credit for fuels produced prior to the date of their completed registration. However, many U.S. producers are now reporting that they have not received the required registration letters even though they applied by the July 15 deadline put forth by the IRS. Moreover, they are reporting that some IRS officials are making the registrations contingent upon the taxpayers providing information -- such as lifecycle carbon scores -- for which Treasury has not yet provided any guidance. According to some taxpayers, the requests for information are not consistent from official to official."
The lawmakers said the delays are "creating confusion" in the marketplace and stand to have a "significant negative economic impact" on clean fuel producers, transportation fleets, fuel marketers, farmers and others.
The Biden administration has been under pressure to take action, https://www.dtnpf.com/….
Industry representatives said lack of action by the Biden administration is putting biodiesel and renewable diesel plants in jeopardy, https://www.dtnpf.com/….
Todd Neeley can be reached at todd.neeley@dtn.com
Follow him on social platform X @DTNeeley
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