Managing Tax Credit Loss and Audit Risk

After multiple §6418 filing seasons, the transferable tax credit market now has enough of a track record to see how audit and recapture risk is manifesting in practice. 

To examine how these risks are manifesting, Crux drew on three primary sources: a survey of tax credit buyers and investors, an analysis of Crux's executed tax credit transfer agreements, and interviews with leading experts from Holland & Knight, Dinsmore & Shohl, GBX Group, and the IRS. 

This is one of the first data-backed looks at how these deals are actually being audited, structured, and defended. Unpack the insights: 

• The IRS landscape by the numbers — roughly 90% of buyers reported no IRS contact on their tax credit transfer positions.
• Audits remain rare, but the data reveals what the IRS actually scrutinizes when it does engage.
• No-fault indemnity and meaningful external credit support are now baseline expectations, not negotiated premiums.
• The two provisions to negotiate most carefully, drawn from deal-terms data and expert perspective are contest provisions and tax gross up treatment

Download the executive summary today. For the complete analysis, including a full deal-terms breakdown across every major TCTA provision, the IRS audit and recapture landscape in depth, and interviews with former IRS leaders and tax controversy counsel, get in touch with the Crux team.