Environmental remediation costs have a significant financial impact on both industry and government. It has been estimated that the costs of complete environmental remediation could run as high as one trillion dollars. Furthermore, "the tax treatment of these costs may vary the total cost by more than a third." Thus, the tax treatment of environmental clean-up costs will have a tremendous financial impact on both the taxpayer and the United States Treasury. In an attempt to alleviate uncertainty surrounding the tax treatment of environmental remediation costs, the Internal Revenue Service (IRS) issued Revenue Ruling 94-38 on June 3, 1994. However, since its issuance, there has been a question whether Revenue Ruling 94-38 was a step in the right direction with respect to the tax treatment of environmental clean-up costs, leaving behind the uncertainty created by Technical Advice Memoranda (TAMs), also known as Private Letter Rulings, 92-40-004, 93-15-004, and 94-11-002. This Article concludes that Revenue Ruling 94-38 did not accomplish this, so the question remains and the uncertainty lingers.
Recommended CitationPasquale Sommella, Revenue Ruling 94-38: The Uncertainty Continues - A Look at Using the Tax Code to Effectuate Environmental Remediation , 13 Pace Envtl. L. Rev. 345 (1995)
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