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were constructively received by the Foriers when accrued, thus
constructively paid and deductible.
Discussion
Petitioner has dredged up the deeply buried, oft-rejected
"constructive payment" doctrine. Respondent contends petitioner,
a cash method taxpayer, may deduct the wages at issue only when
actually paid. Petitioner contends that the Foriers could have
drawn the accrued wages when they wished and that they were in
constructive receipt of the wages. Therefore, the argument goes,
the doctrine of constructive payment should be applied under
these facts, and petitioner should be allowed to deduct the
unpaid accrued wages. We disagree.
Respondent's determination is presumed correct, and
petitioner bears the burden of proof. See Rule 142(a); Welch v.
Helvering, 290 U.S. 111 (1933). Petitioner concedes it is a cash
basis taxpayer. As such, it may only deduct expenditures in the
year paid. See secs. 446, 461; secs. 1.446-1(c)(1), 1.461-
1(a)(1), Income Tax Regs. While a cash basis taxpayer must
include in income amounts actually or constructively received
during the year, see sec. 451 and sec. 1.451-1, Income Tax Regs.,
there is no such provision for constructive payment. It is now
horn-book law that "constructive payment" is not a necessary
corollary of "constructive receipt," and what may be income to
one may not be a deductible payment by the other. See Citizens
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