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contracts without retaining the all events test or explicitly
stating that the all events test is not to be utilized.
Petitioner also contends that the section 460(b)(1)(B)
parenthetical language “with respect to any amount properly taken
into account after completion of the contract, when such amount
is properly taken into account” indicates an intent to include
the all events test as part of the percentage of completion
method. While this language does contemplate the resolution of
some items after the year the contract is completed, there is no
indication that Congress intended this language to incorporate
the all events test in the percentage of completion method of
section 460. The phrase “amount properly taken into account
after completion of the contract” could include amounts properly
taken into account for reasons unrelated to the all events test.
For example, it is possible for a long-term contract to be
complete for tax purposes even though the taxpayer reasonably
expects to incur additional unforeseeable costs in a post-
completion tax year. It is also possible that contingent items,
such as disputed claims, cannot be reasonably estimated before
the completion of the contract, in which case revenue from those
disputed claims would not be taken into account until after the
completion of the contract. Moreover, the parenthetical language
indicates an intent to use the all events test for purposes of
adjusting the “actual” contract price. Cf. sec. 460(b)(2); sec.
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