April 21, 2003
The Honorable Pamela F. Olson
Assistant Secretary (Tax Policy)
Department of the Treasury
Room 3120 MT
1500 Pennsylvania Avenue, N.W.
Washington, D.C. 20220
Robert E. Wenzel
1111 Constitution Avenue, N.W.
Internal Revenue Service
Room 3000 IR
Attention: CC:ITA:RU (REG-125638-01)
Re: Comments on Proposed Regulations Providing Guidance Regarding Deduction and Capitalization of Expenditures [REG-125638-01]
Dear Assistant Secretary Olson and Commissioner Wenzel:
The American Institute of Certified Public Accountants (AICPA) respectfully submits the following written comments on the Internal Revenue Service's and the Department of the Treasury's proposed regulations regarding the deduction and capitalization of expenditures incurred in acquiring, creating, or enhancing intangible assets. The AICPA is the largest professional association of certified public accountants in the United States, with more than 350,000 members in business, industry, public practice, government, and education.
We acknowledge the enormous effort put forth by the IRS and Treasury to provide a framework for capitalization issues regarding expenditures incurred in acquiring, creating, or enhancing intangible assets, and we strongly support their objective of resolving the numerous capitalization issues generated by the Supreme Court's decision in INDOPCO, Inc. v. Commissioner, 503 U.S. 79 (1992). We are firmly committed to working with the IRS and Treasury to develop clear, consistent, and administrable rules incorporating safe harbors, simplifying assumptions and de minimis rules to reduce controversies and the attendant compliance and administrative costs.
Enclosed are an original and eight (8) copies of the AICPA's comments on the above-referenced proposed regulations. The comments were developed by members of our Tax Accounting Technical Resource Panel's Capitalization Task Force and approved by the Tax Executive Committee. We would be pleased to discuss the content of these comments with you or a member of your staff at any time. If you have any questions, please contact either: Robert Kilinskis, Chair of the Tax Accounting Technical Resource Panel, at (312) 242-9855; or George White, AICPA Technical Manager, at (202) 434-9268.
Robert A. Zarzar
Chair, AICPA Tax Executive Committee
Jeffrey H. Paravano (Senior Advisor to Assistant Secretary)
Eric Solomon (Deputy Assistant Secretary for Regulatory Affairs)
B. John Williams, Jr. (Chief Counsel)
Gary B. Wilcox (Deputy Chief Counsel-Technical)
Download the comments