you and I both know that in the world of substance------which is what we pretty much deal in (with the exception of handling negotiations with wives, employees, etc where all too often the "way it is presented" has more effect than the "what" of the presentation)-------you are absolutely correct.

However, don't discount the world of the IRS..........which has the stated legal right to argue the result of two different, separate cases which have materially the same, identical facts from two different perspectives.

Say you spend 5000 to clear the brush from a farm which you just bot.......and some of that is not directly in the area of the crop ground, or say you clean off some river bottom that has grown up so that you can farm it....................technically speaking, under the law, those expenses have to be capitalized just like major repairs to a piece of equipment.........but, being land improvements, such cannot be depreciated.

Most will deduct that money..............and most are not audited in the normal course.

If an audit however occurs..........and the agent just got reemed by his superior for being too easy on taxpayers, or he just failed to get a promotion.......or he has gout in his big toe..........do you think that your "compelling appeal" to his good nature about whether those expenses were costs to put the land into a condition to be able to participate in the production process...........or if those expenses were necessary in order to allow a continuation of the already established production process.........is going to mean much, if your document from the dozer operator says "clearing brush    5000"?  The document does not precisely tie the procedure to a deductible expense definition, the amount of the money is significant enough indicate that a lot of work was done, AND the amount of the money is significant enough to help the IRS to pay the agent's salary-------5000 x tax rate of 15% plus 15% self employment tax plus interest, plus accuracy related penalties of another 10%+.

The court cases exist...................so, the IRS does take exception, regardless of "intent".

The fix---------merely know the law, and sidestep the grey areas by getting the documentation that is needed.

Consider ripping out terraces----------deductible expense, or capitalized land improvement?

The land was being farmed before, when the terraces existed.  Removing them might decrease the yields due to washing.  However, it's much easier to farm with the 16 row than the 6row that existed when the terraces were built.  Such cannot be a conservation expense------NRCS will not make that a part of a plan.  So, it has to be something that allows a continuation of the production  process-------ie without it, the process would not be able to be continued easily.           Result..............Just make sure the dozing bill has the proper terms on it that fit the law.

Say, putting a bigger culvert in the ditch between two fields.............if it is to allow the water to move faster thru the ditch, how does that help production?  If the ditch erodes more, there is no harm to the land under production.  BUT, if the crossing is being eroded, and therefore one cannot easily get the equipment to the other side, that directly affects and is related to the production process.  So, the bill should say something about "........fixing crossing to allow the equipment traffic", as compared to "..........culvert needed to prevent further erosion of the ditch."  Just saying "fixing crossing" leaves everyone to establish their own description of purpose-------including the IRS.

One kills any arguments............the other allows room for interpretation..........and the IRS has more time, money, and human resources to argue their side of it.

How many times does this kind of issue show up?       During audits.

Do the agents understand the economics of the assessement process?  ie, do they understand that it can be a tremendous cost to a taxpayer to fight an issue, and therefore the professional involved might be inclined to suggest just paying the freight on those "grey" areas, resulting in the agent taking home uncontested money?

Do bears crap in the woods?