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Alexander Zakupowsky Quoted on IRS Procedure Providing Natural Gas Safe Harbor Rules in Tax Notes

"Tax Pros See Smooth Implementation for Natural Gas Safe Harbor"

Tax Notes

Alexander Zakupowsky discussed the recently released Internal Revenue Service (IRS) revenue procedure that provides safe harbors which allow natural gas utilities current federal income tax deductions for several expenditures capitalized for financial statement and regulatory purposes.  The project has been on the U.S. Department of the Treasury-IRS priority guidance plan since 2011.This revenue procedure (Rev Proc 2023-15, 2023-18 IRB) provides procedures for taxpayers to obtain automatic consent to change their method of accounting to the safe harbor method of accounting. The release of this procedure "is a major step forward for both the IRS and the industry in that it provides some, I think, understandable safe harbor rules that both should welcome," Zakupowsky said. Zakupowsky, who represented an industry association that requested the guidance through the IRS Industry Issue Resolution (IIR) program, further said that the results "show there was a great deal of collaborative effort that went into an answer that both sides can live with and administer." Natural gas replacement property has been an area fraught with controversy between taxpayers and the IRS, so clear standards was one of the goals both the agency and industry wanted to achieve through the IIR process, according to Zakupowsky.