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adjustment were not treated as making the tax adjustment
contested and nonaccruable.
H.E. Fletcher Co. v. Commissioner, a Memorandum Opinion of
this Court dated Oct. 26, 1951, involved a taxpayer’s attempt to
accrue interest relating to tax adjustments in the year in which
the interest was paid, not for years to which the interest
related. The case involved no evidence that the tax adjustments
were contested or other than fixed and definite. The Court did
not allow the accrual basis taxpayer to accrue the interest in
the later year in which the interest was paid.
As we understand the above authorities, situations which
would allow the accrual of interest relating to tax audit
adjustments for the years to which the interest relates generally
are distinguishable from situations such as those involved herein
(namely, situations where facts relating to the tax audit
adjustments and the amounts thereof are, for a number of years,
indefinite, where the adjustments are eventually developed based
largely on information available to both taxpayers’ and
respondent’s representatives only over the course of years after
the filing of the tax returns, where negotiations occur with
regard to the nature and character of the underlying transactions
giving rise to the tax adjustments, and where agreements with
regard to the tax adjustments are reached through such
negotiations years after the filing of the tax returns to which
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