New tax credit sale regulations released today by the Internal Revenue Service are largely the same as proposed tax credit sale regulations issued in June last year.

Any news is in the comments that the IRS rejected.

The IRS said it received about 80 comment letters.

The tax credit sale market was a $4 to $9 billion market last year. The market ramped up quickly and has remained strong in the first quarter this year.

First, the IRS mostly rebuffed suggestions that it should make it easier for individuals to buy tax credits. Most tax credit buyers are large companies.

Second, it rebuffed suggestions that it should allow bonus tax credits to be sold separately from the underlying base tax credits. Bonus credits can be claimed on renewable energy projects in areas that are "energy communities" -- basically areas that are transitioning from oil, gas and coal employment -- and on projects that use enough domestic content. There are also so-called LMI bonus credits for small solar and wind projects under 5 MW in size that are in low-income areas or cater to low-income people.

The IRS stuck to its position that a project owner can sell a percentage of the total tax credit for which the project qualifies, but not strip out a bonus credit and sell just that. This has been an issue in tax equity financings where the tax equity investor is not willing to take a bonus credit into account in pricing. The developer would prefer to keep the bonus credit and sell it separately.

Third, tax credit sellers asked the IRS to let buyers pay in advance for production tax credits that are claimed over 10 or 12 years on electricity output or captured CO2 emissions. The IRS requires such tax credits to be paid for one year at a time. The IRS said allowing advance payments in forward sale transactions raises too many complicated tax issues. However, it said the seller can borrow against the expected future proceeds from the sale of the credits, and if the facts are right, the lender can be the buyer of the credits.

Finally, brokers and intermediaries asked for the ability to create a liquid trading market in tax credits. The IRS rejected the suggestion, and warned brokers and other intermediaries to be careful. If they are transferred tax credits as intermediaries, any retransfer will run afoul of a rule that tax credits cannot be sold twice. If they are not transferred tax credits but make payments to tax credit sellers, the IRS said the payments could be income to the sellers.

The final tax credit sale regulations can be found here. A summary of the rules for tax credit sales can be found here.

The Treasury is trying to issue as much remaining Inflation Reduction Act guidance as possible before a deadline after which an incoming Trump administration and Republican Congress could use the Congressional Review Act to rescind guidance. The Congressional Review Act can be used by an incoming new Congress next January to rescind any agency rules issued in the last 60 legislative days of the previous Congress. Some calculations put the deadline as early as late May.

The Congressional Review Act has been used 20 times since it was enacted in 1996 to reverse agency rules. Of those, 16 were in the first term of the first Trump administration. It has not been used to reverse any tax regulations.