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Market Segment Specialization Program (MSSP)

Placer Mining Industry

Table of Contents


Appendix A - References

Applicable Code Sections

43 CFR Ch.11 Treas. Reg. section 1865.0-5(c) Patents and Conveyance of Land
IRC section 263A Capitalization and inclusion in inventory costs of certain expenses
IRC section 291 Special rules relating to corporate preference items
IRC section 611 Allowance for deduction of depletion
IRC section 612 Basis for cost depletion
IRC section 613 Percentage Depletion
IRC section 614 Definition of property
IRC section 616 Development expenditures
IRC section 617 Deduction and recapture of certain mining exploration expenditures.

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Revenue Rulings by Code and Treasury Regulation Sections

Revenue Ruling Number and Description IRC Treasury Sections Regulations
70-287, 1970-1 C.B. 146 617 1.617-1
Expenditures paid or incurred by a mining company in connection with core drilling to ascertain the existence of commercially marketable ore are "exploration expenditures" within the meaning of IRC section 617.
70-288, 1970-1 C.B. 146 616 1.616-1
Expenditures paid or incurred by a mining company in connection with core drilling to further delineate the extent and location of existing commercially marketable ore to facilitate its development are "development expenditures" within the meaning of IRC section 616.
70-289, 1970-1 C.B. 147 617 1.617-1
Expenditures paid or incurred by a mining company in connection with core drilling from within an existing mine to ascertain the existence of a new ore deposit are "exploration expenditures" within the meaning of IRC section 617.
74-282, 1974-1 C.B. 150 167 1.167(a)-1
  616 1.616-1
Strip mining; land purchased as dumping area for overburden. The cost of a tract of land containing an exhausted open pit mine, purchased for use as a dumping area for overburden removed from an adjacent strip mine at a price greater than the going price of similar tracts containing no open pit mine, is not deductible as a development expenditure. The entire cost must be capitalized, but the portion attributable to the exhausted open pit mine is an expenditure for an asset that is depreciable over its useful life based on the capacity of the open pit and the rate of dumping overburden into it.
74-67, 1974-1 C.B. 63 174 1.174-1
  617 1.617-1
Research and experiments; mining exploration; core and non-core drill holes. Expenditures paid or incurred before January 1, 1970, by a domestic corporation under a mining lease agreement involving the drilling of core and non-core holes in connection with the production of minerals are mining exploration expenditures subject to the provisions of IRC section 617. Additional expenditures required to use the drill holes for designing and testing a new mining method are research and experimental expenditures and are subject to the provisions of IRC section 174.
75-122, 1975-1 C.B. 87 174 1.174-2
  616 1.616-1
  617 1.617-1
Mining; research and experimental expenditures. A domestic mining corporation's expenditures incurred directly in the development of prototype mining equipment and in perfecting a new metallurgical process, including the cost of shipping mineral samples to the research laboratory, are research and experimental expenditures deductible under IRC section 174(a). However, the expenses for driving shafts, drifts, cross-cuts, and for other production facilities that are not limited to the research activities are mine development expenses within the meaning of IRC section 616.
77-188, 1977-1 C.B. 76 165 1.165-1
  263 1.263(a)-1
  614 1.614-1
  617 1.617-1
Geological and geophysical exploration expenditures. The tax treatment of geological and geophysical expenditures, for the purpose of obtaining data that will serve as a basis for the acquisition or retention of a mineral property by a taxpayer engaged in exploring for minerals is discussed; I.T. 4006 superseded.
90-20, 1990-1 C.B. 117 616 1.616-1
  617 1.617-1
Carrying party's costs to explore, develop, and operate a mineral property; deductibility. The taxpayer may deduct all amounts it paid or incurred prior to payout that qualify as exploration expenditures under IRC section 617(a) if it has made a proper election under that section. The taxpayer may also deduct all amounts it paid or incurred prior to payout that qualify as development expenditures under IRC section 616(a).

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Government Agencies

Federal

Agency Address Telephone
U.S. Department of the Interior, Office of the Secretary 1689 C St, Ste 100, Anchorage AK 99501-5151 (907) 271-5485
U.S. Department of the Interior, Bureau of Land Management, Alaska State Office 222 W 7th Ave #13, Anchorage AK 99513-7599 (907) 271-3323
Arctic Office 1150 University Ave, Fairbanks AK 99709-3844 (907) 474-2302
Bureau of Mines, Alaska Field Operations Center 3301 C St, Ste 525, Anchorage AK 99503-3935 (907) 271-2455
Mine Safety and Health Administration, Juneau Field Office Federal Building, 107 W 9th, PO Box 22049,Juneau AK 99802 (907) 586-7165

State (Alaska)

Agency Address Telephone
Department of Natural Resources, Division of Mining 3601 C St, Ste 800, PO Box 107016, Anchorage AK 99510-7016 (907) 762-2165
Northern Regional Office 3700 Airport Way, Fairbanks AK 99709-4699 (907) 451-2790
Department of Environmental Conservation, South Central Regional Office 3601 C St, Ste 1334, Anchorage AK 99503 (907) 563-6529
Northern Regional Office 1001 Noble St, Ste 350, Fairbanks AK 99701 (907) 451-2101
Alaska Minerals Commission PO Box 80148, Fairbanks AK 99708 (907) 479-6240

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Non-Governmental Groups and Associations

Name Address Telephone
Alaska Miners Association, Inc., Statewide Office 501 W Northern Lights Blvd, Ste 203, Anchorage AK 99503 (907) 276-0347
Fairbanks Branch PO Box 82524, Fairbanks AK 99708 (907) 455-6739
American Institute of Professional Geologists, Alaska Section PO Box 9-2082, Anchorage AK 99509 (907) 562-3279
Society of Mining Engineers PO Box 625002, Littleton CO 80162-5002 (303) 973-9550
Placer Miners of Alaska PO Box 83151, Fairbanks AK 99708 -
Miners Advocacy Council PO Box 73824, Fairbanks AK 99707 (907) 479-0471
Northwest Mining Association 414 Peyton Bldg, Spokane WA 99201 (509) 624-1158
Western Mining Council, Kenai Peninsula Chapter Old Nash Rd, Seward AK 99664 (907) 224-5963

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Page Last Reviewed or Updated: 30-Aug-2012