IRS: Enhanced Oil Recovery Credit Phased Out Completely for 2012 Costs

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IRS in Notice 2012-49, scheduled for publication in Internal Revenue Bulletin 2012-31, announces that the enhanced oil recovery credit for qualified costs paid or incurred in 2012 is phased out completely. Pursuant to Internal Revenue Code Section 43(b), the amount of the credit is reduced for any taxable year if the “reference price,” determined under Section 45K(d)(2)(C), for the calendar year preceding the calendar year in which the taxable year begins is greater than $28 multiplied by the inflation adjustment factor for that year.