Recent IRS rulings on environmental cleanup costs reflect positive policy, narrow application

Article Abstract:

The 1994-95 Revenue Rulings 94-38 and 95-74 provide favorable tax treatment of environmental cleanup costs and associated contingent liabilities by allowing deductions of most bioremediation costs. However, Technical Advice Memorandum (TAM) 9541005 unrealistically narrows the applicability of 94-38, a ruling partly due to the taxpayer's negative behavior in the case. Although the TAM does distinguish 94-38 from the particular facts of the case, the possibility remains that these revenue rulings could be narrowly interpreted in future cases as well.

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Government reaches right policy result in revoking controversial environmental technical advice memorandum

Article Abstract:

The IRS revised its policy on the limited deductibility of environmental remediation expenses by revoking Technical Advice Memorandum (TAM) 9541005. This reversal properly evaluates the case facts, particularly the temporary break in ownership, which the earlier controversial decision failed to do. Under the revised TAM, the taxpayer is allowed to take bioremediation expense deductions because his expenses did not create a capital asset and he remains liable for cleaning up the property.

Environmental aspects, Charitable contributions, Charitable donations

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1999 yields home office expense deductions (finally)

Article Abstract:

Congress amended IRC section 280A in the Taxpayer Relief Act of 1997 to overturn the US Supreme Court's decision in Commissioner v. Soliman limiting tax deductions for home office expenses. Strict IRS regulatory requirements still must be met to receive the new favorable treatment effective in 1999. The definition of 'principle place of business' continues to be unclear and may result in further litigation.

United States, Public Finance Activities, Personal Income Tax Deductions, Personal income tax, Home offices

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