IRS says LSL replacements will not need to be reported as taxable income

The Internal Revenue Service (IRS) will issue an official tax guidance update on March 11 that work done by water service providers to replace lead service lines on private property will not need to be reported as taxable income.

The IRS and the U.S. Environmental Protection Agency (EPA) clarified in a Feb. 23 ruling that publicly funded replacement of lead service lines (LSL) on private property does not constitute taxable income and thus does not trigger IRS reporting requirements.