IRS Issues GLAM Regarding Safe Harbor Rules Involving Renewable Energy Tax Credits (with Mann Comment)

The IRS issued a General Legal Advice Memorandum ("GLAM"). The memorandum discusses the applicability of certain safe harbor rules in Rev. Proc. 2007-65 to transactions involving the Section 45 wind energy production tax credit, and to transactions involving the Section 48 solar tax credit.

Mann Comment: The GLAM makes the obvious point that the wind safe harbor rules do not necessarily apply to solar transactions and then proceeds to apply them. The transaction being discussed did not meet the safe harbor standards, the GLAM concludes. However, the transaction seems to have been structured before the Third Circuit Decision in Historic Boardwalk and so would not be constructed the same way now. The most interesting part of the GLAM is the redacted portion, of course, which presumably discusses whether the transaction is valid for tax purposes despite not meeting the safe harbor rules.

See: IRS GLAM.