Tribe may no longer pass renewable-energy credits to lessee

Plain-English summary

An earlier private letter ruling allowed a tribe to elect under section 50(d)(5) to pass investment credits associated with renewable-energy assets to an unrelated lessee. After reconsideration, the IRS concluded that the tribe could not make that election. The IRS prospectively revoked Private Letter Ruling 201310001. The tribe could place no further reliance on the earlier ruling.

Ruling snapshot

• Question: Could a tribe pass renewable-energy investment credits to an unrelated lessee under section 50(d)(5)?
• Outcome: Revocation, effective prospectively.
• Key authorities: IRC §§ 38, 50(d)(5).

Full text (IRS public release)

Internal Revenue Service                                       Department of the Treasury
                                                               Washington, DC 20224

Number: 201640010                                              Third Party Communication: None
Release Date: 9/30/2016                                        Date of Communication: Not Applicable
Index Number: 38.00-00, 50.00-00
                                                               Person To Contact:
-----------------                                              ---------------, ID No. ----------------
-------------------------------------                          Telephone Number:
---------------------------------------------------            --------------------
-------------------------------                                Refer Reply To:
--------------------------                                     CC:PSI:5
                                                               PLR-117279-16
In Re: ---------------------------------------------------     Date:
                                                               June 29, 2016




LEGEND:

Tribe =            ---------------------------------------------------
                  ----------------------

Dear ------------:

      As discussed in a telephone conversation with Taxpayer’s authorized
representative, we are revoking Private Letter Ruling 201310001, dated
December 5, 2012.

       In Private Letter Ruling 201310001, the Internal Revenue Service concluded that
Tribe may elect to pass investment credits associated with the Renewable Energy
Assets to an unrelated third party lessee (Lessee) under § 50(d)(5).

       After reconsideration, we have concluded that Tribe may not elect to pass
investment credits associated with the Renewable Energy Assets to Lessee under
§ 50(d)(5). Accordingly, Private Letter Ruling 201310001 is revoked prospectively, and
Tribe may place no further reliance on the ruling.
PLR-117279-16                               2


       In accordance with the power of attorney, we are sending a copy of this letter to
Tribe’s authorized representative. We are also sending a copy of this letter to the
appropriate SB/SE office.

                                         Sincerely yours,



                                         Theresa M. Melchiorre
                                         Assistant to the Branch Chief, Branch 5
                                         Office of Associate Chief Counsel
                                         (Passthroughs and Special Industries)

Enclosure:
      Copy for 6110 purposes


cc: