Possibility of Improper Geothermal Energy Tax Credit Claims

RCED-83-1: Published: Dec 2, 1982. Publicly Released: Dec 2, 1982.

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GAO evaluated the reasonableness of geothermal energy tax credit claims made by individual taxpayers. In performing this review, GAO did not examine any income tax returns.

The Internal Revenue Service (IRS) statistics indicate that taxpayers may be improperly claiming residential energy tax credits for geothermal energy expenditures. These tax credits have been claimed by taxpayers residing either in States without geothermal resources as defined by IRS, or in States with such resources but at depths too great to be economically useful. Without an examination of individual tax returns, it was not possible to prove that improper tax credit claims have been made. However, GAO believes the statistics provide sufficient indications of a potential problem to warrant IRS action.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Commissioner of Internal Revenue should: (1) test the propriety of selected geothermal tax credit claims; and (2) determine the extent to which a problem exists that warrants expanded IRS action.

    Agency Affected: Department of the Treasury: Internal Revenue Service


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