Final answer:
The statement is false because intangible drilling costs (IDCs) can be immediately deducted in the year incurred or capitalized and amortized, which is different from depletion that pertains to tangible investments in resources.
Step-by-step explanation:
The statement that intangible drilling costs must be capitalized and written off through depletion is false. In the oil, gas, and mining industry, intangible drilling costs (IDCs) are expenditures to develop wells that cannot be recovered once spent. These costs are unique to the industry and can include expenses such as labor, fuel, and drilling rig rental. Tax law allows these costs to be deducted immediately in the year they are incurred or capitalized and amortized over a certain period. Depletion, on the other hand, is the process of allocation the cost of natural resources over the period they are consumed. It is a separate deduction from IDCs and applies to the physical or tangible investment in the natural resource.