Ezel / IRS Rulings / 200906048

CCA 200906048: Traceable steam use did not require allocation

Number
200906048
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Enhanced Oil Recovery Credit
Topics
Income and deductions
Code sections
§ 43
Ruling dated
September 25, 2008
Publicly released
February 6, 2009
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 2009, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2009
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
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

Chief Counsel addressed an allocation question involving steam and the enhanced oil recovery credit. The allocation and de minimis rule was available for assets used in both qualifying and nonqualifying activities. The steam differed because the same steam was not used for both kinds of activity. Because the taxpayer could trace which steam went to qualifying activity and which did not, no allocation was needed.

Ruling snapshot

  • Question: Did the taxpayer need to allocate steam between qualifying and nonqualifying activities?
  • Outcome: Advice given: no allocation was needed because the steam could be traced to each use.
  • Key authorities: IRC § 43.

Full text (IRS public release)

ID: CCA_2008092507272029 Number: 200906048
Release Date: 2/6/2009
Office: ----------------------------
UILC: 43.00-00

From: --------------
Sent: Thursday, September 25, 2008 7:27:25 AM
To: -----------------
Cc:
Subject: RE: Question

I agree with you. Allocation and de minimis rule was available for assets that are used in both qualifying and nonqualifying activities. Steam is different from these assets because same steam was not used in both qualifying and nonqualifying manner. No allocation is required/ needed in this case because t/p can trace which steam was used in qualifying activity and which was not.

I apologize for not replying earlier.

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