IRS Changes Rule That Will Benefit Ethanol Producers

CattleNetwork.com
08/28/2009 08:31AM

Following over a year of intense work by the Renewable Fuels Association with the Internal Revenue Service, the agency on Aug. 24 issued a Notice of Proposed Revenue Ruling clarifying that it will not seek to impose a change in the cost recovery periods used by most ethanol producers.

Historically, most ethanol producers have used cost recovery (or depreciation) periods of five years. About 18 months ago, IRS advised the industry that the cost recovery period should be seven years instead of five years, and that had to be retroactive, and would apply to all tax returns of ethanol producers that were still open for examination by the IRS. The RFA succeeded in persuading the IRS not to make their decision retroactive.

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