U.S. Tax Court Ruling Validates the Firm’s IRC sec. 179D Process and Methodology
alliantgroup, the nation’s premier consulting firm for small and medium-sized businesses, is celebrating a historic win for taxpayers. The U.S. Tax Court issued a precedent-setting opinion on IRC sec. 179D for alliantgroup’s client.
The 179D deduction incentivizes efforts to increase the energy efficiency of a building. At the time of this case, taxpayers could claim a deduction up to $1.80 per square foot for qualifying buildings where the energy consumption was reduced below the ASHRAE standard.
In 2013, Edwards Engineering engaged alliantgroup to help them claim the 179D deduction. Edwards contracted with a federal government entity, the VA, to supply and install components of a federal building’s HVAC system. Subsequently, the IRS denied the claim, challenging the process and methodology.
Claiming 179D requires several key steps including, but not limited to:
- Identification of the designers
- Obtaining an allocation letter from the appropriate entity
- Modeling and Inspection of property
- Certification of energy consumption
The U.S. Tax Court found that alliantgroup properly applied the law in each of the above steps – overruling the IRS’ interpretations of the law in Johnson v. Comm’r, 160 T.C. No. 2. Where most U.S. Tax Court decisions come in the form of a memo, this decision came in the form of an opinion, binding law, that was agreed upon by all 19 U.S. Tax Court Justices. And further, it is the only tax court opinion on 179D that specifically addresses the key steps to substantiating this deduction.
“This is a huge win for taxpayers and sets a precedent for legitimate 179D providers. At alliantgroup, we take pride in our more than 20 years of quality service and expertise in our clients’ industries.” Matthew Noll, alliantgroup Chief Operating Officer.
alliantgroup is the nation’s premier consulting and management engineering firm with a mission to strengthen America’s small and medium-sized businesses through reinvestment in innovation and job growth. We educate businesses, the industry groups that serve them and the accounting firms that advise them on federal and state credits and incentives that are legislated by our government to keep the U.S. competitive in the global landscape. alliantgroup is headquartered in Houston, Texas with additional offices located in Austin, Boston, Chicago, Indianapolis, New York, Irvine, Sacramento, Washington, D.C.; Hyderabad, India; and Bristol and London in the U.K. For more information, visit alliantgroup and engage with us on LinkedIn, Facebook, Twitter, and YouTube.