45Q Lessons Learned in 2025
In our client work, we have learned three key lessons about 45Q filing in 2025.
Lesson 1: While filing seems daunting, the process can be managed and controlled.
Lesson 2: Don't rely on external tax consultants for data collection. Instead, empower an internal multi-disciplinary team.
Lesson 3: Once your internal team has completed data collection and prepared filing documentation, position your external tax advisors to take the perspective of the IRS and conduct an end-to-end audit.
Lesson 1: While filing seems daunting, the process can be managed and controlled.
IRS 45Q filing requires submitting IRS Form 8933 and associated schedules. In total, there are 407 line-items across seven distinct forms.
To manage and control the process, The Validate 45 Playbook assigns each of the 407 line-items to one of twenty-four checklists. You then take these checklists and assign accountability of each checklist to the proper person in your organization.
The checklist owners then meet on a monthly bases to assess data readiness and data availability.
With the checklists assigned to a specific responsible individual and a monthly meeting established, the filing process becomes managed and controlled.
Lesson 2: Don't rely on external consultants for data collection. Instead, empower an internal multi-disciplinary team.
The Validate 45 Playbook assigned twenty-four checklists are organized by "function". "Functions"include CCUS equipment management, well management, accounting, etc. While external tax advisors are experts on IRS requirements, they will lack the domain knowledge of each of these functions.
Thus, appointing your own functional experts to carry out the specific requirements of the Validate 45 Playbook will lead to accurate and more efficient data collection.
The opposite of this simple and controllable path is asking your tax advisors to conduct data collection across companies and functions. This common failure mode leads to extended delays and confusions of roles and responsibilities.
Lesson 3: Once your internal team has completed data collection and prepared filing documentation, position your external tax advisors to take the perspective of the IRS and conduct an end-to-end audit.
By leveraging the Validate 45 Playbook checklists and establishing a controlled cadence to deliver data, the filing can be prepared for inspection in a timely manner. At this point, leverage your tax advisers to do what they are good at: auditing the complete filing.