This announcement is to advise that Form 8830, Enhanced Oil Recovery Credit, will not be issued for 2006 because the credit is phased out for 2006.
The enhanced oil recovery credit is equal to 15% of the taxpayer’s qualified enhanced oil recovery costs for the tax year, but phased-out as crude oil prices increase. The applicable crude oil prices have increased sufficiently for the credit to be phased-out entirely for 2006.
However, 2006 calendar year taxpayers may still be entitled to the credit as a result of having it passed through to them from fiscal year partnerships (other than electing large partnerships) or S corporations whose tax year began in 2005. In such a case, the partnership or S corporation will provide the taxpayer the necessary information to report the credit on the 2006 Form 3800, General Business Credit.
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