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buyer and seller prior to the time when the seller has
acquired an absolute and unconditional right to receive
payment, and where the stipulation amounts to a binding
contract between the parties so that the buyer has a
legal right to refuse payment except in accordance with
the terms of the agreement, then the doctrine of con-
structive receipt does not apply, and the taxpayer is
not required to report the income until the same actu-
ally is received by him. * * * [Citations omitted.]
We shall now address the constructive receipt issue presented
in this case. In doing so, we bear in mind that the determination
of whether a taxpayer has constructively received income is
essentially a question of fact. See Martin v. Commissioner, supra
at 822.
In support of their position, petitioners first contend that
Mr. Palmer and Olin Ordnance orally modified the Marion plant/
Palmer consulting agreement as of September 12, 1994, the effec-
tive date of that agreement, before Mr. Palmer had a right to
receive any nonemployee compensation under that agreement with
respect to, inter alia, the period from February 6, 1995, to the
execution of the July 1995 amendment. According to petitioners,
the terms of that alleged oral modification are essentially the
same as the terms of the July 1995 amendment, including the
deletion of the last sentence of paragraph 6 of the Marion plant/
Palmer consulting agreement entitled “PAYMENT OF CONSULTING FEES”
and the insertion in its place of the following sentences:
Correct invoices submitted for payment to Mr. R.R.
Harris for approval shall be paid within thirty (30)
calendar days of the date of receipt, or deferred to a
mutually agreed upon future date, but not later than
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