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Abstract: 

The Biden Administration and many other governments, scientists, companies, and concerned individuals are increasingly focused on worldwide environmental issues regarding carbon dioxide and the need to reduce the amount present in the atmosphere. The United States offers incentives, in the form of tax credits, to sequester carbon. The complex requirements to claim these tax credits are set forth in Internal Revenue Code Section 45Q and Treasury regulations promulgated thereunder. Additional guidance has been issued from time-to-time including in recently issued Revenue Ruling 2021-13. The Biden Administration has proposed further modifications to the Section 45Q provisions which will, if enacted, further subsidize carbon sequestration efforts and developer and investor interest in such projects.

Keywords: IRC Sec. 45Q, carbon, sequestration, Rev. Rul. 2021-13, tax credit

Affiliations:  1: BakerHostetler; 2: BakerHostetler.