Final answer:
The claim that intangible drilling costs must be capitalized and written off through depletion is false; they can commonly be fully deducted in the year incurred for tax purposes.
Step-by-step explanation:
The statement that intangible drilling costs must be capitalized and written off through depletion is false. Intangible drilling costs (IDCs) are expenses related to drilling wells for oil or gas that do not have a salvageable value. In the United States, these costs can often be fully deducted in the year they occur for tax purposes. This immediate deduction is intended to encourage investment in the oil and gas industry. However, companies also have an option to capitalize IDCs and amortize them over the life of the well. This decision is strategic and depends on the company's financial and tax situation. Therefore, intangible drilling costs generally do not have to be capitalized unless a company chooses to do so.