David Burton Quoted in Media on IRS Ruling on Production Tax Credit

Akin Gump tax partner David Burton spoke with several media outlets following the issuance of new IRS guidance on qualification for the renewable energy production tax credit.

Burton told North American Windpower that the requirement for wind developers to show a “continuous effort to advance toward completion” of a facility could be a hindrance for tax-equity deals because of the “subjective nature” of the continuous-construction provision. He adds there will now be “an additional subjective element that requires an incremental layer of analysis for tax-equity investors and their counsel to grapple with.”

Speaking to Environment & Energy Daily, Burton said the uncertainty caused by the new rule is likely to hit small developers hardest and favor those “with balance sheets that can guarantee tax indemnities with respect to whether or not there was continuous construction necessary to get the PTCs.”

Burton further analyzes the new IRS provision for Law360, telling the publication that the new rules do not permit a developer to “get a lot of money, buy a lot of parts and store them in a warehouse.” There must be proof of continuous efforts toward construction.