In this episode of S&C’s Critical Insights, S&C Tax Co-Heads Isaac Wheeler and Davis Wang, along with Tax Counsel Bella Schapiro and Special Counsel Aharon Friedman, continue their discussion on The One Big Beautiful Bill Act. They dive into the policy debates driving the OBBBA changes to green energy and international tax, highlighting opportunities and challenges for taxpayers. They also set out areas that will be a priority for guidance by the Treasury Department and the IRS.
A preview of the conversation can be found in the Q+A below.
Isaac: Let’s talk a little bit about green energy and the IRA. I was hearing that some rollback of the IRA was happening, but that the more established technologies like wind and solar should be largely safe, but it’s almost like the opposite happened. Aharon, did something change as part of the negotiations of the bill?
Aharon: I think there’s an underlying current amongst Republicans as to wind and solar subsidies needing to be done with. For decades, these industries told Republicans that they need temporary incentives in order to get them off the ground, but at some point in time they would be able to be sufficient on their own and compete in the marketplace. This conversation has been going on for 20 years and I think Republicans started asking more questions as well and just thought it was time to start cutting it off. I also think from a policy perspective, there have been more questions asked on the Republican side of the aisle with regard to how solar and wind, because they’re temporary, affect the grid.
Isaac: Let’s move on to regulatory guidance because a big part of what now tax policy moves towards is what do the regulations look like that are interpreting the bills. Bella, do you want to discuss this?
Bella: There’s over 60 calls for regulations by the Treasury in this bill. Some of it is to explain and provide details or rules and some of it is to make the mechanics work. And even beyond those that are specifically authorized in the text, there are other provisions that will require Treasury to provide guidance and explanations to taxpayers about. So I think it will be interesting to see what they prioritize, what comes out first and how various provisions are interpreted, particularly given the lack of legislative history.