Hatch questions Treasury and IRS about energy grant program

Senate Finance Committee Chairman Orrin Hatch (R-Utah) is questioning the Treasury Department and Internal Revenue Service about a cash-grant program for green-energy projects.

“While this program has expired, the potential for fraud and need for oversight remain,” Hatch said in a letter to Treasury Secretary Jack Lew and IRS Commissioner John Koskinen on Tuesday.

Under a program created by President Obama’s stimulus law, renewable energy project developers received cash grants in lieu of certain tax credits. Treasury has awarded about $25 billion of grants under the program as of Jan. 1.

Hatch has questions about the Obama administration’s oversight of the program in light of a 2013 Treasury Inspector General for Tax Administration (TIGTA) report that found the IRS didn’t have a system to label the entities that received the grants. As a result, TIGTA said there was the potential for grant recipients to claim tax credits to which they are not entitled.

Hatch also said he questioned Treasury’s efforts to review applications for the grants before they were awarded. He said he is “encouraged” to see reports of Treasury lowering grant amounts in some circumstances but is concerned that there may be other cases where the department did not properly review applications.

“This program is far too large with the potential for far too much fraud to simply be left without coordinated and sustained oversight by both the Department and the IRS,” Hatch said.

Hatch asked Lew and Koskinen several questions and asked them to provide answers by April 1. Among other things, Hatch asked about any oversight mechanisms Treasury and the IRS have in place and the communication between the agencies about the grants and tax credits.