Biofuel Tax Credit Claims Need More Scrutiny, Watchdog Says

The IRS needs more authority to properly evaluate—and deny, if necessary—biofuel tax credit claims, an agency watchdog said in a new report.

The Treasury Inspector General for Tax Administration evaluated biofuel tax claims and found 42 of the 142 taxpayers sampled didn’t provide the required documentation. That amounted to more than $30.3 million in unallowable biofuel tax credits.

But under current law the IRS can only address the claims after the returns are filed. TIGTA recommended that the IRS work with the Treasury Department’s Office of Tax Policy for a legislative proposal to change that rule.

• The biofuel tax ...