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MLPs Tumble on FERC’s Revised Income Tax Policy

MLPs Tumble on FERC’s Revised Income Tax Policy

In an unprecedented move, FERC (the Federal Energy Regulatory Commission) revised its income tax policy for MLPs. MLPs, which aren’t taxed at the corporate level and which operate as pass-through entities, allocate their income to investors. To compensate investors for the income tax burden, MLPs have been receiving an income tax allowance from customers on FERC-regulated pipelines.