Inflation Reduction Act implementation teams focus on enhanced taxpayer service

WASHINGTON — With the funding from the Inflation Reduction Act (IRA), the Internal Revenue Service continues to help taxpayers in unique ways to take advantage of clean energy credits.

The IRA, with its associated funding, gave the IRS the opportunity to transform taxpayer services – creating new, fully electronic processes and systems, updating legacy systems and improving compliance and fraud mitigation.

The agency continues focusing on customer service and expanding online tools by offering virtual sessions to answer taxpayer questions, helping with technical issues and providing a steady assistance for those looking to benefit from the clean energy credits.

IRS Energy Credits Online

In November 2023, the IRS announced that sellers of clean vehicles can register using the new IRS Energy Credits Online tool.

Known as IRS Energy Credits Online or IRS ECO, this free electronic service is secure, accurate and requires no special software, making it accessible to large and small businesses alike.

The IRS’s new Energy Credits Online tool allows dealers and sellers of clean vehicles to complete the entire process online and receive advance payments within 72 hours of the expiration of a cancellation period. The tool will generate a time of sale report that the vehicle buyer will use when filing their federal tax return to claim or report the credit.

IRA and CHIPS Pre-filing Registration Tool

In December 2023, the IRS announced that qualifying businesses, tax-exempt organizations or entities such as state, local and Indian tribal governments can register using the new IRA/CHIPS Pre-filing Registration Tool, available free from the IRS so they can take advantage of the elective payment or transfer of credits.

The Inflation Reduction Act and the Creating Helpful Incentives to Produce Semiconductors Act, known as CHIPS, allows taxpayers to take advantage of certain manufacturing investment, clean energy investment and production tax credits through elective pay or transfer.

Elective payment and the transfer election create alternative ways for applicable entities and eligible taxpayers who have earned one of the IRA clean energy or the CHIPS credits to get the benefit of the credit even if the taxpayer cannot use the credit to offset their tax liability.

Milestones

To date, more than 900 entities registered nearly 59,000 facilities and properties for a direct payment or transfer of credit. IRS registered 13,200 dealers, acknowledged 96,800 advance payments and paid over $665 million.

The IRS and Treasury conducted a robust and wide-ranging educational campaign on these new provisions to benefit taxpayers, including hosting office hour sessions where representatives from the IRS are available to answer questions related to the preregistration process.

Office hours

The IRS also developed new ways to engage end users and share messaging on IRA clean energy credits, to include implementing a specialized customer service model that provides personalized services so taxpayers can receive prompt assistance with applying for clean energy credits. The IRS is committed to resolving any issues facing manufacturers, dealers and sellers navigating the IRS’ new ECO tool.

For example, the IRS hosted over 40 “office hours” sessions with more than 5,000 attendees to assist users with clean vehicle registration, elective pay and transferability on IRS ECO. During these sessions, IRS subject matter experts conduct walk-throughs of the registration process and answer questions.

Source: IRS-2024-121, April 25, 2024