Announcing the Tax Law Center’s Climate Tax Project
We are excited to announce the Tax Law Center’s Climate Tax Project, a two-year commitment to offer technical input on implementation of the Inflation Reduction Act (IRA)’s climate tax provisions and support rigorous engagement from public interest stakeholders.
Roughly three-fourths, or $270 billion, of the climate investments in the IRA are run through the tax code. Treasury and the Internal Revenue Service (IRS) must issue extensive regulations and other guidance implementing this major climate policy. Their implementation decisions have high stakes for the tax system and will determine how successful the IRA is in achieving its projected emissions reductions and other policy goals.
The Tax Law Center will offer analysis and comments on Treasury and IRS climate tax implementation guidance in areas where tax technical analysis is most important. For example, the IRA’s provisions provide various routes to and limits on “monetization”: how the economic value of the climate tax provisions can be accessed by governments, tax-exempts, and businesses, even when those players have little or no tax liability. Weighing in on how Treasury and the IRS interpret and implement the IRA’s monetization provisions requires understanding how tax attributes (credits, deductions, losses, etc.) can be used by, or transferred to, different entities. These decisions will in turn affect the level, speed, and types of investments supported by the IRA.
More broadly, as we have previously explained, public interest stakeholders will have important insights on how Treasury and the IRS’s climate tax implementation decisions will affect the emissions reduction, environmental justice, labor, and other goals of the IRA. Their perspectives can help the IRS and Treasury make better decisions about what guidance to prioritize, the content of that guidance, and how they communicate it. Public interest perspectives will also help ensure that the tax credits support investments that in fact reduce emissions and do not subsidize “dirty” technology.
To inform implementation decisions most effectively, public interest stakeholders in the climate field will need to understand unique Treasury and IRS processes and the legal and institutional frameworks that govern the implementation and enforcement of tax legislation. We will work to help increase public interest stakeholders’ awareness of opportunities to provide input on issues where Treasury and the IRS are still building capacity and expertise. For instance, on February 9th we are co-hosting a workshop with the Furman Center, the Guarini Center, and the State Energy & Environmental Impact Center for state and local government officials that will provide an overview of the IRA’s climate tax credits and monetization provisions. State and local government officials can register here.
The Climate Tax Project is led by Senior Attorney Advisor and Director of the Climate Tax Project Mike Kaercher and Attorney Advisor Taylor Cranor. Mike previously designed and advanced climate tax provisions while on detail to the House Ways & Means Committee, and spent seven years working for the IRS Office of Chief Counsel, where he worked on the implementation of new international tax regimes. Taylor developed substantial expertise in climate tax policy as a Tax Law and Policy Fellow at the Tax Law Center.
We are also seeking an additional tax expert to join this exciting project at the intersection of climate policy and tax policy: please see our “Attorney Advisor — Climate and Clean Energy Tax Specialist” role and view our other open positions here.
If you have any questions about our climate tax work, feel free to e-mail us at taxlawcenterclimate@nyu.edu.
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