Alcoa, Inc. v. United States

OPINION

ROTH, Circuit Judge:

The issue before us is whether a taxpayer’s expenses for environmental clean-up of its industrial sites, mandated by changes in environmental law, qualify for the beneficial tax treatment afforded by section 1341 of the Internal Revenue Code, 26 U.S.C. § 1341. Section 1341 applies when a taxpayer must restore a substantial amount of money, which the taxpayer had received in a prior tax year under a claim of right. Section 1341 allows the taxpayer to take a deduction in the current tax year for the amount of taxes the taxpayer would have saved if the amount restored…