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event, there is nothing in the regulation that contradicts the
plain language of the statute.
As stated above, even if a regulation does not clearly
contradict the language of the statute it purports to interpret,
the regulation may still be invalid if it is fundamentally at
odds with or inconsistent with the statute’s origin and purpose.
See United States v. Vogel Fertilizer Co., supra at 26; CWT
Farms, Inc. v. Commissioner, supra at 1062. Because the use of
the word “estimated”, alone, does not reveal the congressional
intent, we must determine whether the regulation harmonizes with
and implements the congressional mandate in some reasonable
manner.
There is no doubt about Congress’ concern that the completed
contract method of accounting for long-term contracts permitted
an unwarranted deferral of the income from those contracts. See
S. Rept. 99-313 (1986), 1986-3 C.B. (Vol. 3) 140; Staff of the
Joint Comm. on Taxation, General Explanation of the Tax Reform
Act of 1986, at 527 (J. Comm. Print 1987). Congress sought to
limit the tax deferral obtainable through use of the completed
contract method by requiring taxpayers to report income from
long-term contracts on a percentage of completion method. It was
recognized that use of the percentage of completion method could
produce harsh results for taxpayers where an overall loss was
experienced or where actual profits were significantly less than
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