Rev. Proc. 57-18

SECTION 1. PURPOSE.

The purpose of this Revenue Procedure is to correct an erroneous interpretation of the policy set forth in Revenue Rulings 90 and 91, C.B. 1953-1, 43 and 44, with respect to the adjustment of depreciation deductions.

SEC. 2. BACKGROUND.

.01 Revenue Ruling 90, supra, provided that, in order to reduce controversies over depreciation deductions, it will be the policy of the Internal Revenue Service generally not to disturb depreciation deductions taken by a taxpayer nor will Service personnel propose adjustments to such deductions unless there is a clear and convincing basis for a change. Revenue Ruling 91, supra, furnished guidance in the application of Revenue Ruling 90.

.02 The declaration of policy announced in these Revenue Rulings has been interpreted by some to mean that acceptance of depreciation claimed by a taxpayer in any taxable year precludes adjustment to the depreciation claimed in subsequent years.

SEC. 3. STATEMENT OF POLICY.

It is the position of the Service, that if the facts in the case currently under examination furnish a clear and convincing basis for a depreciation adjustment, such adjustment will be made even though a depreciation deduction claimed in a previous return had been accepted without change upon examination.