Report: Section 1603 Grant Recipients May Have Improperly Claimed ITCs

Friday, January 31, 2014 - 8:00am

The Internal Revenue Service (IRS) currently lacks a permanent process to identify taxpayers who received Section 1603 grants and who may have improperly claimed renewable energy investment tax credits (ITCs), according to a report released yesterday by the Treasury Inspector General for Tax Administration. “Review of Section 1603 Grants in Lieu of Energy Investment Tax Credit” found that the IRS’ Compliance Initiative Project (CIP) identified noncompliance issues in more than half of the sample cases it reviewed. Section 1603 funds were granted in lieu of ITCs, and so the report recommends evaluating the feasibility of placing a permanent indicator on the IRS files of Section 1603 grant recipients to ensure that ITCs will not be improperly claimed.

Tune into the Feb. 11 Tax Credit Tuesday podcast to hear more about the report’s findings.