IRS Releases Final Direct Pay Regulations

The Internal Revenue Service ("IRS") and Department of the Treasury earlier this week released final regulations relating to direct cash payments for certain tax credits pursuant to Section 6417 of the Internal Revenue Code (the "Code" and, such rules, the "Final Direct Payment Rules"). The release of the Final Direct Payment Rules follows the issuance of proposed regulations in June 2023 (the "Proposed Direct Payment Rules"). The Final Direct Payment Rules largely adopt the Proposed Direct Payment Rules, with a few exceptions.

The following provides a brief background of Section 6417 of the Code, as well as a summary of the key points from the Final Direct Payment Rules, highlighting the changes from the Proposed Direct Payment Rules.