Journal Issue:
Agricultural Law Digest: Volume 5, Issue 15
Agricultural Law Digest: Volume 5, Issue 15
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Cases, Regulations and Statutes
(
1994-08-05)
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Handling Environmental Cleanup Costs
(
1994-08-05)
For several years, it was generally believed that environmental cleanup expenses were deductible for income tax purposes as an ordinary and necessary business expense. However, the issuance of three private letter rulings beginning in 1992 indicated that the Internal Revenue Service view was that such expenditures should be capitalized and amortized over some time period. Now, IRS has shifted its position in response to widespread criticism of the position taken in the private letter rulings and is willing to accept current deductibility of some environmental cleanup costs.