Re: Proposal to Extend Section 179 of the Internal Revenue Code to All Intangibles

September 15, 2017


The Honorable Orrin G. Hatch
Committee on Finance
United States Senate
219 Dirksen Senate Office Building
Washington, D .C. 20510

Re: Proposal to Extend Section 179 of the Internal Revenue Code to All Intangibles

I write in support of the tax reform efforts being considered by the Senate Finance Committee and propose extending first-year expensing to intangible assets.


My law firm, the Royse Law Firm, is a Silicon Valley-based law firm that advises companies on tax, business, and corporate law matters. Since I have started practicing law, the business world has changed considerably while the tax laws have not kept up with the country’s new and evolving technologies, market demands, or business practices.

Extending Section 179 to All Intangibles

Section 179 of the Internal Revenue Code (the “Code”) allows companies to elect to expense (i.e., deduct immediately) certain tangible assets in the year of acquisition. Currently, intangible property is ineligible for this election.

The breadth of commercially available intangibles has grown dramatically since the Tax Reform Act of 1986. In the 1980s, intangible assets primarily consisted of intellectual property, such as patents and copyrights. Today, domain names, social media assets, cloud-based software, and other computer-related intangible assets are ubiquitous in our day-to-day business operations.

While Congress is considering lowering tax rates via base broadening, we also suggest changing the tax treatment of intangible property under the Code. If 100% expensing of tangible assets is part of tax reform, then this tax treatment should also be extended to intangible assets. If 100% expensing of assets is not part of tax reform, however, then we believe the expensing rule under section 179 should be expanded to include acquired intangibles.

This proposed amendment is a significant tool that Congress can use to spur U.S. investment and boost productivity. Moreover, a revitalized economy means increased employment rates and higher wages for U.S workers. Thus, we support extending Code section 179 to all intangibles as part of comprehensive tax reform.


I hope that you will find this proposal helpful and informative as Congress acts to modernize the tax laws and empower American businesses. I am also available upon request to testify as to the content of this letter and the proposal contained herein.

Very truly yours,


/s/ Roger Royse

Roger Royse
Attorney at Law

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