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year in which all the events have occurred that establish the
fact of the liability, [and] the amount of the liability can be
determined with reasonable accuracy”. See also sec. 1.461-
1(a)(2), Income Tax Regs.
In Dixie Pine Prods. Co. v. Commissioner, supra, the Supreme
Court amplified the all events test by holding that all of the
events to establish a liability have not occurred if the
liability is contingent and is contested by the supposed obligor.
Id. at 519; accord Security Flour Mills Co. v. Commissioner, 321
U.S. 281 (1944).1 In Dixie Pine Prods. Co. v. Commissioner,
supra, the taxpayer had contested a State excise tax that,
otherwise, would have been due for the taxable year in question.
The Supreme Court held that the taxpayer could claim a deduction
only for the taxable year in which its liability for the tax was
finally settled. Id. at 519.
In United States v. Consol. Edison Co., 366 U.S. 380 (1961),
the Supreme Court applied the all events test to a situation in
which a contested real estate tax liability was paid in order to
1 It should be noted that, in the absence of a contest, the
all events test is satisfied with respect to the additional tax
attributable to an income tax deficiency as of the close of the
deficiency year. See Dravo Corp. v. United States, 172 Ct. Cl.
200, 348 F.2d 542 (1965) (additional State capital stock tax paid
without protest by accrual method taxpayer in year 3 with respect
to year 1 properly accruable for year 1). Such additional tax
is, therefore, properly accruable for the deficiency year under
sec. 535(b)(1). Rev. Rul. 68-632, 1968-2 C.B. 253.
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