IRS PLR: Rulings on Utility Depreciation Deduction as Affected by TCJA (IRC §168)

An investor-owned regulated utility received four rulings, relating to depreciation claimed on an electric plant, in terms of the normalization rules of tax code Section 168(i)(9) and Tax Cuts and Jobs Act (Pub. L. No. 115-97, Dec. 22, 2017) Section 13001(d), given the TCJA’s tax rate reduction (from 35% to 21%) reducing both Taxpayer’s deduction and its tax on recovery of any cost-of-removal (COR) under-accrual — producing in effect a deferred tax shortfall and an excess tax reserve. (1) Taxpayer’s deferred tax asset (DTA) (for cumulative timing differences between (a) recognition of accrued gross COR with respect to public ...