Exxon loses lawsuit in federal tax court - May 28, 2000

Providing coverage of Alaska and northern Canada's oil and gas industryMay 2000

Vol. 5, No. 5

Week of May 28, 2000

Exxon loses lawsuit in federal tax court

by The Associated Press

The U.S. Tax Court in Washington, D.C., has rejected a lawsuit from Exxon where the oil company claimed it could deduct from its income taxes depreciation costs related to the future cleanup of Prudhoe Bay.

Had Exxon won the lawsuit, the company could claim it overpaid its taxes since 1977.

State law requires Exxon and other oil companies to dismantle buildings and pipelines and clean up the fields when production stops.

The company had argued the cleanup costs should be viewed as a bill that Exxon must pay in the future.

Federal tax law allows some deductions against future bills.

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