Key Highlights of Internal Revenue Code Section 761 Final Regulations and Impact on Internal Revenue Code Section 6417 Direct Payments
Tax attorneys Amish Shah, Bryan Marcelino, Brad Seltzer, Nicole Elliott, Elizabeth Crouse, Roger Aksamit and Joshua Odintz, along with Senior Policy Advisor David Mann, co-authored an article for The Journal of Federal Agency Action examining final regulations under Section 761 of the Internal Revenue Code that took effect in January of 2025. These regulations allow certain unincorporated organizations that otherwise want to avoid being treated as partnerships for federal income tax purposes to make elective payment elections under the partnership rule of Subchapter K (the Final 761 Regulations). Notably, this change means taxpayers can claim direct payments of energy tax credits under Section 6417. In their article, the authors break down major points from the Final 761 Regulations, including eligibility requirements, modifications to the joint marketing and agent delegation rule, clarification on the eligibility of partnership flip structures and the process for making valid Section 761(a) Elections.
The authors also published a Holland & Knight alert on this topic.
