Appeals Court Affirms Decision on Claiming Alternative Fuel Mixture Credits

Friday, September 27, 2019 - 10:30am

The U.S. Appeals Court for the Federal Circuit affirmed Sept. 26 a U.S. Court of Federal Claims decision in the Alternative Carbon Resources LLC v. United States case that Alternative Carbon Resources cannot show that it was entitled to claim the alternative fuel mixture credits under Section 6426, nor can it show that it had reasonable cause to do so. The decision addressed the effect of the codification of the economic substance doctrine of IRC Section 7701(o) and the relevance of the Joint Committee on Taxation footnote 344 which provides, in part, “… it is not intended that a tax credit … be disallowed in a transaction pursuant to which, in form and substance, a taxpayer makes the type of investment or undertakes the type of activity that the credit was intended to encourage.”