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HALPERN, J., concurring: Although I have joined in the
majority’s opinion, I write separately to set forth more fully
why I believe petitioner may not accrue the contested tax
liability in question.
I. Application of the All Events Test
The majority notes: “Our holding in J.H. Rutter Rex
Manufacturing Co. v. Commissioner, T.C. Memo. 1987-296, was
consistent with our holding in Doug-Long, Inc. v. Commissioner,
73 T.C. 71 (1979), which, in turn, followed the Supreme Court’s
reasoning in Dixie Pine Prods. Co. v. Commissioner, 320 U.S. 516
(1944), and related precedent.” Majority op. p. 15. It is upon
Dixie Pine Prods. Co. and the “related precedent” that I wish to
focus.
The seminal case establishing the basic rule for when a
liability is incurred and, thus, is taken into account under the
accrual method of accounting for Federal income tax purposes is
United States v. Anderson, 269 U.S. 422 (1926), which holds that
a liability is incurred in the year in which occur all the events
needed to create an unconditional obligation to pay such
liability. That test (the all events test) is now embodied in
section 1.446-1(c)(1)(ii)(A), Income Tax Regs., which provides
that, under an accrual method of accounting (in addition to the
requirement of “economic performance”, added in 1984), a
liability is incurred for income tax purposes “in the taxable
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