Safeguarding Your IRS Section 45 Tax Credit

IRS Section 45 Production Tax Credit is a per-kilowatt-hour tax credit for electricity generated by qualified energy resources and sold by the taxpayer to an unrelated person during the taxable year. Qualified energy resources include wind, biomass, geothermal, hydroelectric, and refined coal. Section 45 provides a tax credit for refined coal production during a 10-year period. A "refined coal production facility" means a facility for refined coal production placed in service after October 22, 2004 and before January 1, 2012.

 ECSI personnel travel throughout the U.S. performing inspections of IRS Section 45 refined coal production facilities. These inspections are a thorough investigation of the equipment, operating data, chemical inventory of the sorbent additives, scale calibration and maintenance, and health, safety and environmental records and procedures.

 Though not required by IRS Section 45, ECSI’s inspection report can be used in the event of an IRS audit.  It is an independent, third party verification that the facility is in compliance with all applicable environmental, health, and safety laws. The report will also verify that the sorbent application rates are in compliance with qualified application rates in order to achieve the emission reductions required to qualify as a refined coal product under IRS Section 45.

 Not only does an ECSI inspection safeguard your facility in the event of an IRS audit, but we’ve also found errors in scale calibration adjustments, sorbent additive inventories, operating reports and ultimately discrepancies in refined coal tons produced and reported to the IRS. The discrepancies found during our inspections have saved production facilities thousands of dollars.