Independent firms benefit from full expensing of their intangible drilling costs, while the integrated firms can expense only 70 percent of their IDCs and must write off the rest over a five- year period.
Since drilling wells is the only means of finding oil and natural gas, IDCs essentially amount to what any other industry would be able to deduct as a part of its cost of goods sold, a concept of accounting and tax law as old as the tax code itself.