Guardrails on 45Q Reduce Costs and Improve Targeting
Chapter 45Q provides large tax credits for carbon capture, utilization and storage (CCUS). Unlike budgetary spending, these credits are uncapped and the costs to taxpayers in terms of lost federal tax revenues appears to have been greatly underestimated. Not only is the government’s financial exposure uncapped, but compliance with statutory rules is self-reported, and because tax returns are confidential under federal law (26 USC §6103), only the IRS is legally entitled to know the identities of claimants and the amounts of their claims.