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While it is clear that Congress intended the total contract
price to be computed by means of an estimate, the legislative
history contains no reference to disputed or contingent items.
Furthermore, there is no explicit indication as to whether the
all events test applies. There is a reference to contingent
items in the General Explanation of the Tax Reform Act of 1986,
which contains the statement that “For purposes of the ‘look-
back’ method, the contract price shall reflect all amounts
received under the contract, including amounts received after the
contract completion date as a result of disputes, litigation or
settlements relating to the contract.”7 Id.
Because disputed claims are includable in the look-back
computation, an earlier inclusion of disputed claims will result
in smaller underpayments and interest. Thus, requiring taxpayers
to treat disputed claims as part of the contract price as soon as
it is reasonably estimated that they will be received harmonizes
with the statute’s overall purpose, as reflected by its
7 While the General Explanation of the Tax Reform Act of
1986 does not rise to the level of legislative history because it
is prepared by congressional staff after enactment of the
statute, it has been considered highly indicative of what
Congress did, in fact, intend and we take it into consideration.
See Staff of Joint Comm. on Taxation, General Explanation of the
Tas Reform Act of 1986 (J. Comm. Print 1987); Estate of Wallace
v. Commissioner, 965 F.2d 1038, 1050-1051 n.15 (11th Cir. 1992);
FPC v. Memphis Light, Gas & Water Div., 411 U.S. 458, 472 (1973)
(indicating that the General Explanation of the Tax Reform Act is
a probative contemporary indication of the effect of a statutory
provision).
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