Overstating the cost ratio cuts the understatement threshold to 1 percent
To provide for reconciliation pursuant to title II of H. Con. Res. 14, section 70512, Sec. 70512.
Written by .
Overstating the cost ratio cuts the understatement threshold to 1 percent
The document says “shall”Who acts: Secretary of the TreasuryHow: statuteSec. 70512 in the PDF
What the document says
“in subparagraphs (A) and (B), by substituting `1 percent' for `10 percent' each place it appears, and”
The section adds a new subsection (m) to section 6662 of the Internal Revenue Code of 1986 so that where an applicable energy credit is disallowed, the substantial understatement test is applied by reading 1 percent for 10 percent and without regard to subparagraph (C). A disallowance of an applicable energy credit means the disallowance of a credit under section 45X, 45Y or 48E for overstating the material assistance cost ratio. A conforming change extends the rule to excessive payments under section 6417.
What the document actually says
“in subparagraphs (A) and (B), by substituting `1 percent' for `10 percent' each place it appears, and”
That sentence, in plain words
One percent takes the place of ten percent. That swap is made in two spots.
What this is about
The figure sets when a shortfall counts as large. A lower figure makes a fine easier to trigger. It applies where an energy credit is refused.
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Provide for reconciliation pursuant to title II of H. Con. Res. 14, Public Law 119-21, sec. 70512, 139 Stat. 252 (2025). https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm
This page
“Overstating the cost ratio cuts the understatement threshold to 1 percent,” Provide for reconciliation pursuant to title II of H. Con. Res. 14, section 70512, Sec. 70512. Read the Mandate, https://readthemandate.org/pl-119-21/proposal/sec70512-penalty/ (retrieved August 26, 2026).
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