Nov 28, 2012 Multi-Association Letter to Congressional Committee Leaders on Intangible Drilling Costs and Tax Reform Efforts
Dear Chairman Camp, Ranking Member Levin, Chairman Baucus and Ranking Member Hatch: On behalf of the undersigned, representing millions of American workers, energy producers and consumers, we are writing out of concern that future tax reform efforts could seek to limit or even eliminate the current deductibility of intangible drilling costs (“IDCs”). As you know, IDCs are those costs incurred by an operator of an oil and gas well for the labor, fuel, repairs, hauling and other nonsalvageable expenses required for the drilling of oil and gas wells. They are ordinary and necessary expenses and are no different from expense deductions taken by other businesses. The tax code currently allows operators to deduct these ordinary and necessary business expenses as they are incurred.