Tax-deductibility of clean-up costs—asset or liability?

The IRS [US Inland Revenue Service] reversed its position on the accounting treatment of environmental clean-up costs in Revenue Ruling 94-38. Such costs arise when owners of real property are required to remove hazardous wastes from their land to maintain the environment and comply with environmental laws.

However, whether these costs come under Sec. 162 or Sec. 263 in the Internal Revenue Code has long been subject to debate. Sec. 162 specifies that all ordinary and necessary repairs are tax deductible, while Sec. 263 states that capital expenditures such as permanent improvements that increase property value are not deductible. In two earlier technical advice memoranda, the IRS ruled that clean-up costs were capital expenditures, and thus, not deductible. However, the agency reversed its position in Rev. Rul. 94-38, allowing taxpayers who comply with environmental laws to deduct these costs as expenses (Pritchard 1995).
Suggest reasons why the IRS might have difficulty in deciding whether clean-up costs are expenses or assets.