SECTION 3. SCOPE

.01 In general. Except as provided in section 3.05 below, this revenue procedure applies to requests for guidance on the deductibility (under § 162) or capitalization (under § 263) of environmental cleanup costs incurred in continuing transactions (e.g., occurring over prior and future taxable years). Taxpayers may request a letter ruling under this revenue procedure that will cover all tax years in which costs are incurred under the transaction (‘‘transaction years’’), even if they include years for which a

return has been filed, and even if such return is under examination or before an appeals office.

.02 Environmental cleanup costs. For purposes of this revenue procedure, environmental cleanup costs include, in general, any costs associated with the assessment, mitigation, or remediation of environmental hazards, whether latent or imminent, on the taxpayer’s property or on the property of another. These environmental hazards include, but are not limited to, soil contamination, water contamination, air pollution, leaking underground storage tanks, asbestos, and lead paint.

.03 Factual nature of question. Section 7.01 of Rev. Proc. 97–1 provides that the national office ordinarily will not issue letter rulings in certain areas because of the factual nature of the problem. Although the question of whether amounts are deductible or must be capitalized is generally dependent upon the taxpayer’s specific facts, only in rare or unusual circumstances will the national office decline to issue a letter ruling under this revenue procedure solely because of the factual nature of the question.

.04 Alternative plans and hypotheti- cal situations. Section 7.02 of Rev. Proc. 97–1 provides that the national office ordinarily will not issue a letter ruling on alternative plans of proposed transactions or hypothetical situations. However, the national office will issue a letter ruling under this revenue procedure on proposed parts of a continuing plan of environmental cleanup provided that the taxpayer provides all facts necessary for the Service to reach a determination. If the taxpayer’s plan changes before the environmental cleanup transaction is completed, the taxpayer may request that the national office modify or supplement its letter ruling to address the changes to the plan. See section 8 of this revenue procedure.

.05 Excluded situations. Taxpayers may not request guidance under this revenue procedure in the following situations:

(1) The entire environmental cleanup transaction is completed, and the time for filing returns, with extensions, for all years covering the transaction has passed.

(2) The entire environmental cleanup transaction is a proposed transaction, and the taxpayer may request a letter ruling under Rev. Proc. 97–1.

(3) The identical environmental cleanup issue is in the taxpayer’s return

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for an earlier period and that issue is pending in litigation in a case involving the taxpayer (or a related taxpayer within the meaning of § 267, or a member of an affiliated group of which the taxpayer is also a member within the meaning of § 1504).