- 30 -
to Exxon’s oil wells located in the lower 48 States (as well
as those relating to the Prudhoe Bay oil field), respondent
continues to disallow the accrual of estimated DRR costs.
With regard to the accrual of DRR costs relating to foreign
offshore oil drilling platforms and to Exxon’s oil wells
located in the lower 48 States, Exxon has withdrawn its claims
for refund with regard thereto.
In the referred-to claims for refund, the PBU and Exxon
have raised the issue of whether they may accrue estimated DRR
expenses relating to Prudhoe Bay beginning in 1977, the first
year of the PBU partnership’s existence, and Exxon has pending
refund claims on the issue beginning with each year of the PBU
partnership.
As explained, Exxon’s primary position in these cases is
that estimated DRR costs relating to the oil-producing
equipment and facilities located in the Prudhoe Bay field
should be accruable, in the year such equipment and facilities
are constructed and installed, as capital costs of the
facilities and depreciated under the relevant tax depreciation
system (for the years in issue--ADR and ACRS). Further, with
regard to estimated DRR costs that are capitalized and that
relate specifically to oil wells and to cleanup of oil well
sites, Exxon claims that investment tax credits under section
38 and intangible drilling costs under section 263(c) should
be allowed.
Page: Previous 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 NextLast modified: May 25, 2011