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entered into or a judgment is rendered and all appeals are
exhausted. See United States v. Safety Car Heating & Lighting
Co., 297 U.S. 88 (1936). Petitioner contends that a fundamental
tax principle cannot be “repealed”9 by respondent without
explicit congressional authorization, and no such authorization
is present in this case.
It is true that Congress did not explicitly state that the
all events test should not apply with respect to contingent items
for purposes of long-term contracts. However, because the
section 460 version of the percentage of completion method is a
self-contained, statutorily created form of accounting method
which varies substantially from prior accrual accounting
methodology, we do not believe that an explicit statement from
Congress regarding the all events test is necessary to validate
the regulation. The section 460 approach to the percentage of
completion method is the method of accounting that Congress chose
for the reporting of long-term contract income in order to modify
the deferral of income previously permitted. While section
1.451-3(d)(3), Income Tax Regs., incorporated aspects of the all
events test under the completed contract method, Congress is free
to change the method of accounting with respect to long-term
9 Petitioner’s use of the term “repealed” is a misnomer
because the all events test was developed as a principle of case
law and embodied in regulations. Congress has implicitly
approved of this principle by not subsequently legislating
otherwise.
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