When the American paper industry came up with a plan to get $2 billion in
tax refunds, it first had to get past a guardian of the public’s money: the
Internal Revenue Service.
But the IRS, which has been in the news lately for its aggressive targeting
of politically affiliated nonprofits, took at look at the paper industry’s
efforts and effectively shrugged. With no ruling from the agency, the refunds
went through — based on the findings of the companies themselves. The $2 billion in refunds are a new twist in an earlier controversy about U.S. paper companies and an IRS interpretation of a highway bill provision passed by Congress in 2007.
The controversy began in 2009 when the IRS said that paper companies — which had been generating power by burning a pulping byproduct known as “black liquor” since the 1930s — could add a few drops of diesel and qualify for the 50-cent-a-gallon alternative fuel mixture tax credit.
