In response to various pressures on the energy industry to reduce the environmental impact associated with excess carbon dioxide emissions, many energy companies are investigating carbon capture and sequestration projects as a means of reducing their carbon emissions. In addition to reducing carbon emissions, carbon capture and sequestration projects often qualify for valuable income tax
As announced in Louisiana Tax Commission Statewide Advisory 03-2021 on Hurricane Ida, pursuant to La. R.S. 47:1978.1, Louisiana Assessors in Parishes affected by Hurricane Ida have to reassess property for purposes of the upcoming annual property tax bills to take into account any reductions in fair market value to property as a result of hurricane…
In the wake of Hurricane Ida, many employers are struggling to find ways to maintain their business and protect their most precious asset: their employees. In this article, we review some of the most frequently asked labor and employment law questions facing employers in the aftermath of this catastrophic storm, including payroll issues, attendance issues,…
On July 1, 2021, the Internal Revenue Service published Revenue Ruling 2021-13, which provides guidance on three important issues related to the income tax credit for carbon oxide sequestration found in section 45Q of the Internal Revenue Code. Recall that section 45Q provides for a credit against a taxpayer’s income tax liability based on the amount of carbon oxide (a) captured using carbon capture equipment, (b) placed in service at a qualified facility and (c) disposed of, injected, or utilized in a specified manner. For more information on carbon capture and section 45Q tax credits, see here, here and here.
Continue Reading New IRS Revenue Ruling Provides Opportunities for Financing Carbon Capture Equipment
On October 26, 2020, the U.S. Small Business Administration (“SBA”) published a notice seeking comment on two Loan Necessity Questionnaires (Form 3509 for “for-profit” entity borrowers and Form 3510 for “non-profit” entity borrowers) that are to be submitted by borrowers who have received Paycheck Protection Program (“PPP”) loans and are seeking forgiveness of those loans pursuant to section 1106 of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).
Continue Reading SBA and IRS Create Further Uncertainty with the Federal Income Tax Deductibility of Certain Expenditures Paid for with Funds from a PPP Loan
Recent jurisprudential and legislative developments have significantly altered the Louisiana state tax penalty regime. First, the Louisiana Supreme Court on November 4, 2020 denied the Louisiana Department of Revenue’s writ application in Smith International, Inc. v. Kimberly Robinson, Secretary, Louisiana Department of Revenue , rendering the earlier decision by the Louisiana First Circuit Court of Appeal final. Now, the penalties imposed by Acts 2015, No. 128, eff. July 1, 2015 cannot be applied to tax periods prior to July 1, 2015. In addition, the late payment penalty in La. R.S. 47:1602(A) is no longer applicable to amounts later assessed on taxpayers who timely filed their returns and remitted the amount of tax shown as due on their tax returns. Taxpayers under audit should object to the Department of Revenue asserting these penalties in audit workpapers.
Continue Reading Recent Changes to Louisiana Tax Penalty Regime
The Louisiana Supreme Court addressed the role of the Louisiana Tax Commission in its decision in the case of D90 Energy, LLC v. Jefferson Davis Parish Board of Review, No. 2020-C000200. While the case addressed the property tax assessments of a specific taxpayer, its larger importance is the holding regarding the role of the Louisiana Tax Commission in its review of local property tax assessments, including the assessments of oil and gas property. Louisiana property is assessed by the assessor for the parish where the property is located. The Louisiana Constitution provides a process for the taxpayer to seek review of an assessment that the taxpayer believes is incorrect. La. Const. art. VII, section 18(E) provides that “[t]he correctness of assessments by the assessor shall be subject to review first by the parish governing authority, then by the Louisiana Tax Commission or its successor, and finally by the courts, all in accordance with procedures established by law.”…
Continue Reading Louisiana Supreme Court Addresses the Role of Louisiana Tax Commission
On June 19, 2020, the Internal Revenue Service (the “IRS”) issued Notice 2020-50 which expands the categories of individuals eligible for coronavirus-related distributions (“CRDs”), loans, and loan repayment suspensions as well as resolves some of the issues that were concerning plan administrators and employers under the CARES Act. Under Section 2202 of the CARES Act, a qualifying CRD, which is subject to an aggregate $100,000 maximum, is: (1) not subject to the 10% additional tax on early distributions, (2) generally includible in income over a 3-year period, and (3) to the extent the distribution is eligible for tax-free rollover treatment and is contributed to an eligible retirement plan within a 3-year period, will not be included in income. Section 2202 also provides that: (1) for loans made during on or after March 27, 2020 (the date of enactment of the CARES Act) and before September 23, 2020, the limit on loans from an eligible retirement plan is raised to the lesser of $100,000 (reduced by the excess of outstanding loans) or 100% of the participant’s vested accrued benefit; and (2) for loans with outstanding balances on or after March 27, 2020, a one-year delay in loan repayment due dates is provided with respect to due dates occurring during the period from March 27, 2020, to December 31, 2020. For more information on these CARES Act topics see our prior newsletter here.
Continue Reading Additional Guidance for Coronavirus-Related Distributions and Loans Under the CARES Act
In an April 17, 2020 post to the Liskow Energy Law Blog, we advised our clients and friends that the Internal Revenue Service (“IRS”) had published guidance on how refunds attributable to the CARES Act newly-permitted 5-year carryback of NOLs in section 172 of the Internal Revenue Code (the “Code”) and the accelerated use of AMT Carryforward Credits in section 53(e) of the Code can be obtained. See, J. Bradford, New IRS Guidance on Obtaining Refunds for Net Operating Loss Carrybacks, Corporate AMT Carryforward Credits and Filing Amended Returns for Partnerships (the “Prior Blog Post”). Since that time, the IRS has published on its website additional guidance in the form of frequently-asked questions and responses (“FAQs”) regarding the implementation of the temporary policy allowing (1) corporations to file by fax Form 1139 – Corporation Application for Tentative Refund (“Form 1139”) to obtain a tentative refund for a prior tax year to which an NOL is carried back pursuant to the new NOL carryback rules and to obtain a tentative refund attributable to implementing the new accelerated use of AMT Carryforward Credits and (2) individuals to file by fax Form 1045 – Application for Tentative Refund (“Form 1045”) to obtain a tentative refund for a prior tax year to which an NOL is carried back.…
Continue Reading IRS Updates Guidance on Temporary Procedures to Fax Forms 1139 and 1045 to Obtain Quick Tentative Refunds due to NOL Carrybacks and Accelerated Use of AMT Carryforward Credits
In a previous post to the Liskow website, we advised clients and friends that the CARES Act, P.L. 116-136, enacted modifications to the rules for the use of net operating losses (“NOLs”) and corporate alternative minimum tax carryforward credits (“AMT Carryforward Credits”) for tax years beginning after December 31, 2017 and before January 1, 2021. See, J. Bradford and J. Birdsong, CARES Act Makes Significant Changes to Four Key Business Tax Provisions Enacted in the Tax Cuts and Jobs Act of 2017. The Internal Revenue Service (“IRS”) now has published guidance on how refunds attributable to the newly-permitted 5-year carryback of NOLs in section 172 of the Internal Revenue Code (the “Code”) and the accelerated use of AMT Carryforward Credits in section 53(e) of the Code can be obtained. The IRS also has published guidance allowing business entities classified as partnerships for federal income tax purposes to file amended partnership income tax returns, including Form 1065 and Schedule K-1, to help individual and corporate taxpayers who are partners in those partnerships take advantage of changes in the federal income tax law enacted in the CARES Act.
Continue Reading New IRS Guidance on Obtaining Refunds for Net Operating Loss Carrybacks, Corporate AMT Carryforward Credits and Filing Amended Returns for Partnerships