IR-2020-106: Treasury, IRS provide safe harbor for taxpayers that develop renewable energy projects

IRS Newswire May 27, 2020
News Essentials What's Hot News Releases IRS - The Basics IRS Guidance Media Contacts Facts & Figures Around The Nation e-News Subscriptions The Newsroom Topics Multimedia Center Noticias en Español Radio PSAs Tax Scams The Tax Gap Fact Sheets IRS Tax Tips Armed Forces Latest News Home IRS Resources Compliance & Enforcement Contact My Local Office Filing Options Forms & Instructions Frequently Asked Questions News Taxpayer Advocate Where to File IRS Social Media	Issue Number:    IR-2020-106 Inside This Issue Treasury, IRS provide safe harbor for taxpayers that develop renewable energy projects WASHINGTON –The Treasury Department and the Internal Revenue Service today is providing relief for taxpayers developing renewable energy projects and producing electricity from sources such as wind, biomass, geothermal, landfill gas, trash, and hydropower. Safe harbor is also available for taxpayers using technologies such as solar panels, fuel cells, microturbines, and combined heat and power systems. The IRS recognizes that COVID-19 has caused industry-wide delays in the supply chain for components needed to complete renewable energy projects otherwise eligible for important tax credits. The IRS has issued Notice 2020-41 to provide tax relief to affected taxpayers. For certain projects that began construction in 2016 or 2017, Notice 2020-41 adds an extra year to the four year "Continuity Safe Harbor" provided in existing guidance. If these projects are placed in service in five years construction will be deemed continuous.   Notice 2020-41 also provides assurance for taxpayers who started construction by incurring 5 percent of project costs, and made payments for services or property and reasonably expected to receive such services or property within 3 ½ months. These taxpayers are considered incurred under economic performance rules. The Notice provides that if such services or property are received by October 15, 2020, the taxpayer's expectations at the time of the 2019 payment are deemed reasonable.    Extending the Continuity Safe Harbor and providing a 3½ Month Safe Harbor will provide flexibility for taxpayers to satisfy the beginning of construction requirements and limit the impact of COVID-19-related delays on the ability to claim tax credits. Additional information about tax relief for businesses affected by the COVID-19 pandemic can be found on IRS.gov.   Back to Top         Thank you for subscribing to the IRS Newswire, an IRS e-mail service. If you know someone who might want to subscribe to this mailing list, please forward this message to them so they can subscribe. This message was distributed automatically from the mailing list IRS Newswire. Please Do Not Reply To This Message.

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