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payment was when (or if) it made repairs covered by the terms of
the VSC. If no such repairs were made, the money remained in
escrow until the VSC expired, and even then would not be paid to
the issuing Dealership unless all of the conditions for a release
of unconsumed reserves were met.
There are a number of problems with petitioners’ argument.
First, it confuses the right to receive with both earning through
performance and the right to present payment. Each of these
rights is independently sufficient to require accrual under the
all events test. Schlude v. Commissioner, 372 U.S. 128 (1963);
Automobile Club of New York, Inc. v. Commissioner, 32 T.C. at
911-913. That the Dealerships could not compel the Escrow
Trustees to pay reserves from the escrow accounts does not
control the determination of whether the Dealerships had a fixed
right to receive them. Commissioner v. Hansen, 360 U.S. at 464.
Nor is it dispositive that the Dealerships had not performed any
repair services under the VSC's at the time they collected the
purchase price and deposited it in escrow. Petitioners'
confusion on this point causes them to misread the relevant case
authorities. Thus, they argue that the fact that the cases at
hand concern executory service contracts distinguishes them
materially from the Hansen line of cases:
Hansen and Resale Mobile Homes both involve the sale of
retail installment contracts. In the context of a sale
of property, these cases held that the taxpayers had to
currently recognize the agreed purchase price for the
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