In Notice 2015-4 the IRS provided information on property qualifying for the credit under IRC §48 for placing in service small wind energy property.

The credit is equal to 30% of the basis of qualifying property placed in service for periods ending prior to January 1, 2017. The property must be:

· Constructed, reconstructed, or erected by the taxpayer (or acquired by the taxpayer if the original use of the property commences with the taxpayer);

· Subject to depreciation (or amortization in lieu of depreciation); and

· Meets the performance and quality standards (if any) that have been prescribed by the Secretary by regulations (after consultation with the Secretary of Energy) and are in effect at the time of the acquisition of the property.

Qualifying property uses a “qualifying small wind turbine” to generate electricity. Such a turbine must have a nameplate capacity of no more than 100 kilowatts (kW).

This notice provides information on what will be a qualifying small wind turbine. First, the turbine must meet the quality standards set forth in one of the following:

· American Wind Energy Association Small Wind Turbine Performance and Safety Standard 9.1-2009 (AWEA); or

· International Electrotechnical Commission 61400-1, 61400-12, and 61400-11 (IEC)

The date the standards will be tested is the date the turbine is placed in service for tax purposes.

The notice provides that a manufacturer may provide the certification that its device meets the appropriate standard. The certification will be issued by an eligible certifier (a third party that is accredited by the American Association for Laboratory Accreditation or other similar accreditation body) and the certification can provide the certification in a form that is appropriate to allow the taxpayer to retain the information for tax purposes, including as a printable certification on the manufacturer’s website.

The certification must contain the following items:

· The name and address of the manufacturer; (b) The property name and model number;

· The name and address of the eligible certifier;

· The nameplate capacity of the wind turbine; and

· A signed and dated statement by the eligible certifier that the property complies with the performance and quality standards of AWEA or IEC

The manufacturer will need to retain records to support the qualification of its device and make them available for inspection by the IRS upon request by that agency.

The taxpayer may rely upon the certification and does not need to attach the certification to the return upon which a credit is claimed. However the taxpayer must maintain this certification as part of its books and records required pursuant to Reg. §1.6001-1(a) in support of its tax returns. Such records would need to be kept for as long as the matter is relevant to a tax return for which tax may be assessed by the IRS.

If the IRS determines that a certification is in error or the manufacturer fails to satisfy the documentation requirements, the IRS will publish a notice of withdrawal of the right of the manufacturer to issue a reliance certification. Taxpayers who purchase turbines after that notice is issued will no longer be allowed to rely upon that certification, but those who purchased the turbine on or before that date (even if not installed until after that date) will be able to rely upon the erroneous certification.

A manufacturer that issues an erroneous notification may be subject to various penalties. The notice specifically notes that a liability may exist in that case:

· Under §7206 for fraud and making false statements; and

· Under §6701 for aiding and abetting an understatement of tax liability (in the amount of $1,000 per return on which a credit is claimed in reliance on the certification)

The notice is effective for property acquired or placed in service after January 26, 2015.