WASTE FUELS receive more scrutiny
Power plants that use waste fuels qualify for faster depreciation and can be financed partly with tax-exempt bonds. The IRS said in a “technical advice memorandum” in 1999 — a ruling by the national office to settle a dispute on audit between a taxpayer and an IRS agent — that corrugated containers that a middleman collected, sorted and bailed were not “waste” when delivered to a recycling plant because the material had value. The IRS has been questioning whether other materials are waste on audit.
The National Association of Bond Lawyers urged the US Treasury in a letter in late March to call off the IRS and to work out new guidelines for what qualifies as waste in discussions between the government and industry. The Treasury is in the midst of trying to set priorities for the coming year. There is a limit to the number of issues it can tackle.