Revenue Ruling 85-79: raising confusion to raise taxes

Journal Article · Sat Mar 01 04:00:00 EST 1986 · Oil Gas Tax Q.; (United States)

OSTI ID:5864708

Westin, R A

The Internal Revenue Service added confusion to the calculation of the net income limitation for the Windfall Profits Tax (WPT) in Revenue Ruling 85-79 and Private Letter Ruling 8406006, which appear to have no other purpose than to increase federal revenues. The result was to confuse the meaning of intangible drilling and development costs (IDC), the minimum and alternative minimum tax, and recapture of excess IDC as well. The ruling fragments identical concepts of IDC and costs for income and windfall profit tax purposes, which broadens the scope of the minimum and alternative minimum taxes without signaling that the converse tax burden of Section 1254 recapture has also narrowed. It also warps the concept of taxable income from the property. The situation calls for a withdrawal and new thinking to minimize dissonance in the tax law.

• Research Organization: Univ. of Houston Law Center, TX
• OSTI ID: 5864708
• Journal Information: Oil Gas Tax Q.; (United States), Journal Name: Oil Gas Tax Q.; (United States) Vol. 34:3; ISSN OGTQD
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
021000* -- Petroleum-- Legislation & Regulations
29 ENERGY PLANNING, POLICY, AND ECONOMY
294002 -- Energy Planning & Policy-- Petroleum
ACCOUNTING
CALCULATION METHODS
DEPLETION ALLOWANCES
INCOME
INDUSTRY
LAWS
LEGAL ASPECTS
NATIONAL ORGANIZATIONS
PETROLEUM INDUSTRY
TAX LAWS
TAXES
US DEPARTMENT OF TREASURY
US IRS
US ORGANIZATIONS
WINDFALL PROFITS TAX