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Energy security and clean energy
Part IV: Case study
provisions of the IRA
Concurrently with our transformation efforts, can vary based on whether the taxpayer
we are working to implement the energy adheres to certain labor standards, locates
security and clean energy provisions included activity in certain geographic areas, uses
in the IRA. As we pursue the overall certain domestically produced content and/or
improvements outlined in this Plan, we are meets certain greenhouse gas emissions
incorporating them in our current work. Our thresholds in the production process. We are
implementation efforts to date, and those focused on developing clear, predictable and
planned in the future, illustrate the benefit to transparent approaches to administering these
taxpayers in a more effective IRS. provisions so that taxpayers have the certainty
they need to invest in energy security and
In enacting these incentives, Congress gave clean energy projects.
the IRS new responsibilities for administering
energy tax credits for consumers, small The new mechanisms for taxpayers and other
businesses, communities and industries. entities to monetize energy security and clean
While we have experience with longstanding energy incentives are another important focus
tax incentives in areas such as clean area for IRA implementation. One IRA
electricity production and investment, carbon provision enables tax-exempt organizations
sequestration, clean vehicles, and energy and government entities (including state, local
efficiency, the IRA energy security and clean and tribal governments) to receive energy
energy provisions represent a significant security and clean energy tax credits in the
expansion of the IRS’s responsibilities in this form of elective payments from the IRS.
space. Another provision allows certain entities to
transfer energy security and clean energy
The five transformational objectives described credits they earn through their activity to other
in this document will each help better position parties that may be better positioned to benefit
us to administer the law effectively to further from the incentives. These new incentive
the goals of the legislation. The IRS will monetization mechanisms will significantly
require significant investments, including the expand the range of actors undertaking
overall investments in modernization energy security and clean energy investments
described in this Plan, as well as investments and receiving associated benefits through the
specific to implementing new tax provisions. tax code.
The IRA includes approximately 20 new or
revised energy security and clean energy- In the months since the IRA was signed into
related tax incentives, along with several new law, we have already made considerable
cross-cutting provisions that impact the progress, beginning to draw on the
administration of multiple incentives. implementation funding that Congress
provided. To implement the IRA energy
One key area of focus is developing and security and clean energy provisions, we
communicating clear rules for the energy stood up a dedicated office to devote the
security and clean energy incentives, necessary resources and expertise. We have
especially given changes in the IRA that allow entered into partnerships with the U.S.
the value of incentives to vary based on new Department of Energy to establish programs
factors. For example, depending on the for competitive allocation of certain energy
specific energy security and clean energy security and clean energy credits, including to
incentive, the amounts available to taxpayers spur energy security and clean energy
134 IRS IRA Strategic Operating Plan
Part IV: Case Study
