Senate Democrats are asking the IRS’ internal watchdog to investigate the agency’s apparent decision to unlock hundreds of millions of dollars in tax breaks for liquefied natural gas tankers by treating them as “motorboats.”
Sens. Jeff Merkley (D-Ore.) and Minority Leader Chuck Schumer (D-N.Y.) raised the issue earlier this year when they asked Treasury Secretary Scott Bessent for clarity on whether the IRS had begun granting credits under the Alternative Fuel Excise Tax to liquefied natural gas exporters. Now, they’re asking the inspector general to step in.
“News reports and public financial filings suggest the IRS has allowed taxpayers to claim the AFET credit for fuel used on LNG tankers, without publishing any updated guidance,” the senators said in a Thursday letter.
“Therefore, we request [the acting Treasury inspector general for tax administration to] investigate whether the IRS has made a determination that fuel used on LNG tankers is eligible for the AFET credit,” they wrote.
