SYNCOAL PROJECTS remain in limbo at the IRS
Such projects qualify in theory for a tax credit under section 29 of the US tax code of $1.035 an mmBtu for converting coal into synthetic fuel. The IRS said in October that it would no longer rule that syncoal projects are producing a “synthetic” fuel, except in projects that use waste coal. However, in practice, the rulings window has remained closed to all projects.
Treasury officials now say it will be another couple months at least before there is any progress. The issue has become highly politicized. Clinton officials felt it was better to leave it for the incoming Bush administration to handle rather than try to rush a decision. Bush will need time to fill the top tax positions at Treasury and the IRS.