Shariff Barakat Quoted on IRS Guidance on Projects
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Akin projects & energy transition partner Shariff Barakat was quoted by New Project Media for its article “IRS guidance on projects qualifying for LMI tax credit adders still needs clarification.” The article looks at guidance on the Inflation Reduction Act released by the Internal Revenue Service that, according to NPM, raised more questions than it answered regarding low-to-middle income (LMI) communities and the bonus adder. NPM notes that this guidance is important because renewable development at these communities is a major strategy for developers.
Said Shariff, “In order to qualify for the program, 50% of the ‘financial benefits’ are going to LMI households…the guidance though doesn’t define what is a financial benefit.”
He said that the statute says that billing discounts count as financial benefits, but does not provide much other information—“IRS [needs] to fill in the blanks.”
Shariff continued by noting “Given some of these constraints, a developer might ask how much they need this subsidy to begin with. Some of these projects are already being built in states with incentive programs which provide for competitive power rates and as a result better revenue to the developer over time.” He added that some states, before making final determinations on state-level incentives, are waiting to see how the IRS LMI community adders play out.
