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Sequestration Internal Revenue Service

Sequestration is a budget technique characterized by the implementation of automatic mandatory spending cuts if deficit levels exceed a certain threshold. The Budget Control Act of 2011 utilized sequestration to... more +
Sequestration is a budget technique characterized by the implementation of automatic mandatory spending cuts if deficit levels exceed a certain threshold. The Budget Control Act of 2011 utilized sequestration to encourage Congress to cut federal spending by 1.2 billion dollars. If Congress fails to make the specified funding cuts, sequestration will kick in and  automatic cuts will be made to the federal budget. A good portion of the slated cuts will come from the national security budget.  less -
Bracewell LLP

FY 2021 Sequestration Reduction Rate for Direct Pay Tax Credit Bonds Set at 5.7%

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According to the IRS website, the sequester reduction rate applied to payments made to issuers of direct pay tax credit bonds in fiscal year 2021 will be 5.7 percent. This percentage will apply to all subsidy payments...more

A&O Shearman

IRS Issues Proposed Regulations On Section 45Q Carbon Oxide Sequestration Credits

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The U.S. Internal Revenue Service (IRS) and the U.S. Treasury Department (“Treasury”) have issued proposed regulations (REG-112339-19) providing valuable guidance on credits for the sequestration of qualified carbon oxide...more

Stoel Rives LLP

Coming Attractions: Section 45Q Carbon Sequestration Guidance, Part II

Stoel Rives LLP on

The IRS’s much anticipated new guidance for Section 45Q carbon sequestration tax credits was rather anticlimactic in that it focused on just two of the many issues for which the IRS had solicited comments in May 2019. Largely...more

Bracewell LLP

FY 2020 Sequestration Reduction Rate Set at 5.9%

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According to the IRS website, the sequester reduction rate applied to payments made to issuers of direct pay tax credit bonds in fiscal year 2020 will be 5.9 percent. This percentage will apply to all subsidy payments...more

McGuireWoods LLP

Carbon Sequestration Tax Credits - IRS Requests Comment on Section 45Q Regulations

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In February 2018, the tax credit for carbon capture and sequestration under Section 45Q of the Internal Revenue Code (the carbon sequestration credit) received a significant boost from Congress in the Bipartisan Budget Act of...more

Eversheds Sutherland (US) LLP

IRS requests comments on section 45Q carbon sequestration credit in Notice 2019-32

On May 2, 2019, the Internal Revenue Service (IRS) released Notice 2019-32 (Notice) requesting comments on anticipated regulations and other guidance under section 45Q of the Internal Revenue Code. Section 45Q was originally...more

Bracewell LLP

Tax Reform Could Indirectly Eliminate Direct Pay Subsidy For Outstanding Tax Credit Bonds

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An article released by The Bond Buyer on November 14, 2017, reports that, if Congress were to pass the proposed legislation released by the Committee on Ways and Means of the U.S. House of Representatives on November 2, 2017...more

Bracewell LLP

FY 2018 Sequestration Reduction Percentage for Direct Pay Tax Credit Bonds Set at 6.6 Percent

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According to an update released by The IRS Office of Tax Exempt Bonds, the sequester reduction percentage applied to the payments made to issuers of direct pay bonds in fiscal year 2018 will be 6.6 percent. This percentage...more

Bracewell LLP

FY 2017 Sequestration Reduction Percentage for Direct Pay Tax Credit Bonds Set at 6.9 Percent

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According to an update released by The IRS Office of Tax Exempt Bonds (TEB), the sequester reduction percentage applied to the payments made to issuers of direct pay bonds in FY 2017 will be 6.9 percent. This percentage will...more

Bracewell LLP

FY 2016 Sequestration Reduction Percentage for Direct Pay Tax Credit Bonds Set at 6.8 Percent

Bracewell LLP on

According to an update released by The IRS Office of Tax Exempt Bonds (TEB), the sequester reduction percentage applied to the payments made to issuers of direct pay bonds in FY 2016 will be 6.8 percent. This percentage will...more

Locke Lord LLP

Locke Lord QuickStudy: February 2015 Update on Federal Budget Sequestration Affecting Build America Bonds and Other Direct Pay...

Locke Lord LLP on

As we have noted in previous client advisories, under current law, direct pay bond subsidy payments are subject to federal budgetary sequestration through fiscal year 2024. On February 2, 2015, the Office of Management and...more

Bracewell LLP

FY 2015 Sequestration Reduction Percentage for Direct Pay Tax Credit Bonds Bumps Up to 7.3 Percent

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According to an update released by The IRS Office of Tax Exempt Bonds (TEB), the sequester reduction percentage applied to the payments made to issuers of direct pay bonds in FY 2015 will be 7.3 percent. This new percentage...more

Akin Gump Strauss Hauer & Feld LLP

IRS Issues Notice on the Cash Grant Sequestration and Tax Attributes

Yesterday, the IRS issued a notice confirming the effects of the Cash Grant sequestration with respect to the tax attributes associated with the renewable energy projects that received the Cash Grant. Notice 2014-39 is...more

King & Spalding

Effect of Sequestration on Direct-Pay Bonds

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The American Recovery and Reinvestment Act of 2009 allowed, for a limited period of time, the issuance of taxable state or local bonds for which the U.S. Treasury Department pays the issuer a specified percentage of interest...more

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