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the calendar year and makes an accrual for nongas margin from the
unbilled period. According to section 451(f), a utility must
include in taxable income the revenue attributable to utility
services provided during the taxable year. See S. Rept. 99-313,
supra, 1986-3 C.B. (Vol. 3) at 120-121. Utility services are
“provided” when such services are made available to, and used by,
the customer. Id. “The taxable year in which services are
treated as provided to customers shall not, in any manner, be
determined by reference to (i) the period in which the customers’
meters are read, or (ii) the period in which the taxpayer bills
(or may bill) the customers for such service.” Sec.
451(f)(2)(B). On average, petitioner’s method of accounting
includes in taxable income utility services provided from
December 15 of the prior year to December 15 of the current year.
With respect to the unbilled period, we see no difference in
petitioner’s treatment of revenue from gas costs under its
current method of accounting and the cycle meter-reading method
of accounting that section 451(f) was intended to eliminate.
While it is true that a full year’s worth of income from utility
service is included in determining taxable income, the included
year is not the same as the year intended by section 451(f).
Congress there specified that the income attributable to utility
services must be reported for the same year in which the services
were provided.
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