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expenditure, or (ii) the end of the taxable year
following the taxable year in which the expenditure is
incurred. [Id.]
The list of described expenditures eligible for immediate
deduction under the 12-month rule does not include an expenditure
for, or with respect to, a bank line of credit of the type
acquired by ACC (the professional fees). The ANPRM also advises
that, as one alternative approach designed “to minimize
uncertainty and to ease the administrative burden of accounting
for transaction costs * * * [,] the rules could allow a deduction
for all employee compensation (including bonuses and commissions
that are paid with respect to the transaction)”. Id. at 3464.
On February 15, 2002, the IRS issued Announcement 2002-9,
2002-1 C.B. 536 (originally published in 2002-7 I.R.B. 536),
which is identical to the ANPRM.
On March 15, 2002, the Chief Counsel, IRS, issued Chief
Counsel Notice (CCN) 2002-21, in which the Chief Counsel
announced that the IRS would no longer “assert capitalization
under section 263(a) for employee compensation (other than
bonuses and commissions that are paid with respect to the
transaction), fixed overhead, or de minimis [under $5000] costs
related to the acquisition, creation, or enhancement of
intangible assets or benefits.”
On December 19, 2002, the Treasury Department issued
proposed regulations under section 263(a) (the proposed or
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