Utility Tax
The Troutman Sanders’ Utility Tax practice group is considered to be one of the preeminent utility tax groups in the nation. The group addresses IRS audit and appeals issues, secures private letter rulings, technical advice memoranda and permission to change methods of accounting from the national office of the Internal Revenue Service, and participates in tax litigation, tax planning, and the structuring and evaluation of proposed transactions to a large number of utility clients. Group attorneys conduct substantive tax reviews of the tax returns of a number of electric utilities and conduct a series of seminars every spring on the tax issues related to the tax returns of electric utilities.
Experience
The Troutman Sanders’ Utility Tax practice group is comprised of attorneys who are experienced in representing utility clients whose activities require consideration of federal, state, or local tax matters. The group includes attorneys with prior experience in the Office of Chief Counsel for the Internal Revenue Service and most of the group's attorneys have advanced degrees in tax law.
Troutman Sanders’ utility tax attorneys provide clients with sophisticated analysis and risk assessment, and regularly render tax advice on proposed transactions and return positions. The group also handles tax controversies in all administrative and judicial forums, from initial investigation through trial, and has extensive experience in dealing with tax authorities at the federal, state, and local levels including obtaining rulings from the IRS.
The group services numerous electric and gas utilities, natural gas pipelines, independent power producers, electric transmission companies, developers and owners of renewable energy and financial institutions providing debt and equity capital, and related services to these industries.
Recent or noteworthy experience includes:
- Obtaining rulings from the IRS on tax recovery of certain costs in developing nuclear power plants.
- Obtaining a ruling from the IRS on gain recognition in the sale of an electric generating station.
- Obtaining normalization rulings from IRS.
- Obtaining a ruling from the IRS on bonus depreciation.
- Amicus brief for EEI on Dominion Resources appeal on the associated property rule (Code section 263A).
- Obtaining ruling from the IRS on section 118(a) contribution to capital issue.
- Advising energy market participants on tax aspects of renewable generating facilities including tax credits, Treasury grants and bonus depreciation.
- Advising utilities on tax issues arising from the purchase and sale of renewable energy credits and certificates (RECs).
- Addressing utility specific industry tax issues, such as contributions in aid of construction, related indemnity issues with interconnection and other agreements, normalization issues, energy and alternative fuel tax credits, nuclear decommissioning trust funds and military distribution plant privatizations.
- Providing advice on the rate regulatory issues and strategies associated with the reflection of taxes in the setting of rates, including application of the tax normalization rules.
- Assisting clients with maintaining and protecting tax attributes such as NOLs, deferred inter-company gains and losses and tax credits.
- Tax counsel in a variety of settings, including IRS national office submissions, IRS audits, IRS appeals process, as well as state and local tax examinations and judicial forums.
- Tax court litigation representation over numerous industry issues including nuclear fuel placed in service date, ITC grandfather rules, ownership issues involving capacity buybacks, and issues involving the claim of right doctrine and excess deferred taxes.
- Representing a major utility in a property tax dispute involving a fundamental challenge to the central assessment system.
Legislative
The Utility Tax practice group advises clients on legislative and regulatory tax matters. The group regularly advises the Edison Electric Institute (the trade association of investor-owned electric utilities) and other electric utilities on legislative tax issues relevant to the electric industry. Tax attorneys are very comfortable in drafting legislation, developing and reviewing legislative proposals and negotiating legislative issues with the tax-writing staffs of the House and Senate.
Tax Newsletter
The Utility Tax practice group has developed and continues to publish a subscription-based Washington Developments Tax Service, where they provide advice to clients from all segments of the electric utility industry on emerging legislative, administrative and judicial tax developments of particular relevance to their companies. For more information regarding the tax newsletter, please contact Howard Cooper.