Accelerating Transaction Efficiency in Transferable Tax Credit Deals
At the Tax Executives Institute’s 80th Annual Conference, industry experts gathered to examine one of the most pressing challenges in the rapidly growing transferable tax credit market: transaction speed. In a session titled “How to Close a Deal in Six Weeks,” our founder, Mark Mickelson, joined peers from Crux, Foss & Company, Churchill Stateside Securities, and Gallup to share firsthand insights into how disciplined coordination and clear documentation can reduce transaction timelines — without sacrificing diligence or risking compliance issues.
The Marketplace Imperative
The growing market for renewable energy transferable tax credits has introduced new opportunities for both developers and investors — but it has also highlighted the need for operational precision. As panelists noted, the key objectives are consistent across every successful transaction:
Ensure credits are valid, transferable, and properly certified.
Reduce tax and compliance risk for both buyers and sellers.
Maximize economic benefit and pricing efficiency.
Maintain clear documentation and audit readiness.
Executing on these priorities requires proactive planning from the very first conversation. Deals that stretch over months often do so because of preventable bottlenecks — poor communication, unclear legal ownership, fragmented diligence efforts, or misaligned timelines between counsels and counterparties.
Prerequisites for Success
A recurring theme throughout the discussion was preparation. The panel emphasized that the most efficient closings start with teams who already have core documents and diligence materials organized before the letter of intent is even signed. A well-maintained due-diligence checklist is indispensable for tracking deliverables and assigning responsibilities across internal and external parties.
Equally critical is clarity in legal drafting: establishing which counsel will prepare the principal documents and reviewing redlines ahead of scheduled calls. Early alignment on document ownership prevents version confusion and keeps weekly meetings focused on resolving substantive issues, not formatting disputes.
Structuring for Speed
To compress a transaction into six weeks, both sides must embrace structure. Panelists recommended setting a target closing date early and working backward to define milestones for third-party reports, internal approvals, and counsel review. Weekly calls — held with increasing frequency as the closing approaches — create accountability and surface potential obstacles in real time. Every participant should have a clear action list following each call, and all deal principals, including legal representatives, should be present.
Responsiveness was cited as a differentiator between transactions that close on schedule and those that lag. Having a designated point person — and a backup — ensures rapid turnaround on document edits or follow-up requests. Internal approval processes must also be clarified upfront so that final signatures are not delayed by procedural surprises.
Buyer and Seller Discipline
From the buyer’s perspective, understanding one’s risk profile and liability limits before sourcing opportunities is vital. Experienced counsel can help navigate the 75 percent limitation and three-year carry-back rules. Sellers, meanwhile, must “stand behind their credits” — maintaining an organized data room, setting realistic expectations, and delivering on commitments to foster trust and repeatability.
Conclusion
Efficiency in transferable tax credit transactions is not a function of cutting corners but of tightening coordination. As Mark Mickelson and fellow panelists concluded, deals that close swiftly do so because every stakeholder — buyer, seller, and advisor — executes with discipline, transparency, and preparation.
For more information, reach out to our renewables expert, Faith Larson, at faith@mickco.com or 605-977-4873 ext. 4.
The Company should seek independent legal, tax, and accounting advice as part of this process. Mickelson & Company is not providing legal or accounting services.