CCA 200835032: Prior ethanol-plant depreciation advice should not be followed

Number

200835032

Outcome

Advice

Document type

Chief Counsel Advice

IRS subject

Classification of Property

Topics

Income and deductions

Code sections

§ 168

Ruling dated

August 27, 2008

Publicly released

August 29, 2008

Source

View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2008, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.

About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.

View official IRS release (PDF)

Plain-English summary

An earlier Chief Counsel Advice had classified assets in an integrated corn-to-bioethanol facility under Asset Class 49.5 for depreciation. After further consideration, the IRS and Treasury decided the issue should be handled through published guidance. Chief Counsel therefore instructed that the earlier advice, CCA 200814025, should not be followed when determining depreciation deductions. This memorandum did not provide a replacement asset classification.

Ruling snapshot

Question: Should taxpayers follow the earlier Chief Counsel classification of integrated ethanol-plant assets?
Outcome: Advice given, CCA 200814025 should not be followed
Key authorities: IRC § 168; Rev. Proc. 87-56

Full text (IRS public release)

Office of Chief Counsel
Internal Revenue Service
Memorandum
Number: 200835032
Release Date: 8/29/2008
CC:ITA:B07:JPHuffman
Third Party Communication: None
PRESP-105045-08
Date of Communication: Not Applicable

UILC: 168.20-00

date: August 27, 2008
to: Deputy Area Counsel (Industry Programs) LMSB Area 3, Retail, Food, Pharmaceuticals & Healthcare

from: Branch Chief, Branch 7, CC:ITA:7 (Income Tax & Accounting)

subject: Chief Counsel Advice on Ethanol Plant Depreciation

On December 14, 2007, the office of the Associate Chief Counsel (Income Tax & Accounting) issued Chief Counsel Advice (CCA 200814025) addressing the appropriate depreciation classification of assets used in an integrated facility for converting corn (a biomass) to bioethanol (a liquid fuel). Our advice concluded that the appropriate depreciation classification of these assets under Rev. Proc. 87-56 (1987-2 C.B. 674) is Asset Class 49.5, Waste Reduction and Resource Recovery Plants. Upon further consideration, the Internal Revenue Service and the Department of Treasury think that this issue is better addressed through the published guidance process. Accordingly, CCA 200814025 is not to be followed for determining appropriate tax depreciation deductions.

Please call (202) 622-4930 if you have any further questions.

GEORGE BLAINE
Associate Chief Counsel
(Income Tax & Accounting)

Kathleen Reed
By: _____
Kathleen Reed
Branch Chief, Branch 7
(Income Tax & Accounting)

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