The IRS has addressed which entities must apply for registration for the clean fuel production credit. The IRS issued answers to frequently asked questions (FAQs) on 10 July 2024, also discussing whether disregarded entities that produce clean fuel must register under Notice 2024-49, and how claim procedures will work when the registrant is a disregarded entity.
According to the FAQs, each business unit that has, or is required to have, a separate employer identification number (EIN) and is a producer of clean fuel is treated as a separate person for registration purposes. As a result, two related business units that have separate EINs must separately apply for registration using Form 637 if they are each producers of clean fuel.
In addition, the FAQs provide that a producer of clean fuel that is a disregarded entity for income tax purposes is not treated as a disregarded entity for purposes of clean fuel production credit registration. Thus, clean fuel producers that are disregarded entities must separately apply for registration using Form 637.
Moreover, the FAQs state that an owner of a disregarded entity that is registered for the clean fuel production credit, but that is not itself registered, would be able to claim the credit using the registration number of the disregarded entity.
Note: The Inflation Reduction Act of 2022 (IRA) enacted the Internal Revenue Code section 45Z credit for the production of clean transportation fuels, which would be available from 1 January 2025.
Source: IBFD Tax Research Platform News