On October 15, the IRS issued PLR 202141001 for regulated electric utilities. In its ruling, the IRS reiterated earlier assertions that the net deferred tax asset (DTA) related to the cost of removal (COR) is not subject to normalization, but also added clarification that the deferred tax liability (DTL) and DTA from the salvage value is subject to normalization rules.
Read MoreOn August 14, 2020, the Internal Revenue Service (IRS) issued PLR 202033002 to address outstanding ruling requests on the application of the Section 168 normalization rules to cost of removal (COR). The IRS concluded that the net deferred tax liability (DTL) created by COR is not protected by the normalization rules but did not provide guidance on the actual implementation of the ruling’s conclusions.
Read MoreOn August 14, 2020, the Internal Revenue Service (IRS) issued Revenue Procedure 2020-39 to clarify normalization requirements following the corporate tax rate reduction provided in the Tax Cuts and Jobs Act (TCJA). Though this Revenue Procedure addressed several open questions posed by the utility industry, in some regards, the publication raised more questions than it answered.
Read MoreOn May 7, 2019, the IRS released Notice 2019-33 which formally announced the agency’s intent to issue additional guidance regarding the normalization requirements of excess deferred income taxes which resulted from the decrease in the corporate income tax rate.
Read More
