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by statute, that fact alone meets the first prong of the all
events test. Rather we are of the opinion that the first prong
of the all events test may be met when a statute has the effect
of irrevocably setting aside a specific amount, as if it were to
be put into an escrow account, by the close of the tax year and
to be paid at a future date. In the instant case, the applicable
statutes do not so provide.
Respondent relies on the analysis contained in the Supreme
Court's opinion in United States v. General Dynamics Corp., 481
U.S. 239 (1987). In General Dynamics, the taxpayer, who self-
insured its employee medical plan, deducted estimated costs of
medical care under the plan. The employer's liability was
determinable. The employees' medical needs had manifested
themselves, employees had determined to obtain treatment, and
treatment had occurred. The only events that had not occurred
were the employees’ filing claims for reimbursement before the
end of the taxable year. The Supreme Court found that the all
events test was not met until the filing of properly documented
claims. The filing of the claim was the last event needed to
create the liability and therefore absolutely fix the taxpayer's
liability under the first prong of the all events test. See id.
at 244.
Petitioner focuses on the fact that the liability in United
States v. Hughes Properties, Inc., supra, was in part fixed by
operation of statute and concludes from that that the first prong
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