Additional Actions Need to Be Taken to Identify and Address Noncompliant Biofuel Tax Credit Claims

The Commissioner, Wage and Investment Division, should engage with the Department of the Treasury’s Office of Tax Policy to develop a legislative proposal to require that taxpayers claiming biofuel tax credits provide information that they are properly registered (if applicable) or that they provided the required Certificate of Biodiesel when income tax returns are filed.

The Commissioner, SB/SE Division, should establish a Compliance Initiative Project to conduct examinations of the 42 taxpayers reported in Figure 5 to ensure the validity of the biofuel tax credits that were claimed and that these taxpayers are properly registered and have the required certificates (that contain a valid registration number).

The Commissioner, SB/SE Division, should evaluate if there are opportunities to include biofuel tax credit claims made on the Form 4136 into ongoing examination initiatives involving biofuel.

The Commissioner, SB/SE Division, and Chief, Criminal Investigation, should identify opportunities to partner with the EPA to use the agency’s expertise and data when selecting, conducting examinations and investigations involving taxpayers that claimed biofuel tax credits and revise the MOU as needed.