Frank's Casing Crew and Rental Tools, Inc. - Page 1

                                 T.C. Memo. 1996-413                                  

                               UNITED STATES TAX COURT                                

              FRANK'S CASING CREW AND RENTAL TOOLS, INC., Petitioner v.               
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket Nos. 25058-93, 1327-95.     Filed September 16, 1996.           

                    P is an "oil field contractor" that sells oil                     
               pipes, leases equipment used in oil fields, and                        
               provides crews necessary to operate the leased                         
               equipment.  P's contracts with its customers generally                 
               provide that payment is due when P sends the customer                  
               an invoice that includes all supporting documentation                  
               (i.e., job tickets, equipment tickets, and third party                 
               charges).  On a number of occasions during the relevant                
               years, P did not invoice a customer until after yearend                
               because it had not yet received a third party's                        
               invoice.  In those cases, P did not accrue the related                 
               income until the year during which it invoiced the                     
               customer, even though its contract with the customer                   
               was fully performed by the close of the previous year.                 
               Held: It was not an abuse of discretion for respondent                 
               to conclude that income from the yearend contracts was                 
               accruable for the years in which performance of the                    
               contracts was completed.                                               

               Stanley B. Blackstone, for petitioner.                                 

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