Increased start-up expense deduction applied only in 2010

Plain-English summary

Chief Counsel advised that the temporarily increased deduction and phaseout amounts in section 195(b)(3) applied only to the taxable year beginning in 2010. The email cited the statutory language and a Joint Committee on Taxation report. It also pointed to a Senate Finance Committee summary describing the increase as temporary and a Congressional Research Service report stating that the increased amounts were available only in the 2010 tax year. The advice supported the office's existing position on the limited duration of the increase.

Ruling snapshot

• Question: Did the increased start-up expenditure deduction and phaseout amounts in section 195(b)(3) apply beyond the 2010 tax year?
• Outcome: Advice given that the increased amounts applied only to the taxable year beginning in 2010.
• Key authorities: IRC § 195(b)(3); Senate Finance Committee summary of the Small Business Jobs Act; Congressional Research Service report on H.R. 3854 and H.R. 5297

Full text (IRS public release)

ID:        CCA_2019061914364532
UILC:      195.00-00

Number: 201927021
Release Date: 7/5/2019
From:
Sent: Wednesday, June 19, 2019 2:36:45 PM
To:
Cc:
Bcc:
Subject: RE: Start-up Expenses - PUBWE-111132-19


Hi -------. In addition to the JCT report and the statutory language of section 195(b)(3),
the following also supports the office’s position that the increased amounts in section
195(b)(3) were only for the taxable year beginning in 2010:

1. The Senate Finance’s Summary of the Small Business Jobs Act states “For the
taxable year beginning in 2010, this bill would temporarily increase the amount of start-
up expenditures that may be deducted to $10,000 subject to a $60,000 phase-out
threshold.” (emphasis added).

2. Pages 28-29 of the CRS report to Congress on Small Business Legislation: H.R.
3854 and H.R. 5297, provides that these increased amounts are available in the 2010
tax year only.


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