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The Supreme Court And The Timing Of Deductions For Accrual-Basis Taxpayers, Erik M. Jensen
The Supreme Court And The Timing Of Deductions For Accrual-Basis Taxpayers, Erik M. Jensen
Faculty Publications
This article examines the Supreme Court's two decisions in the late 1980s dealing with the timing of deductions, United States v. Hughes Properties (1986) and United States v. General Dynamics Corp. (1987), and finds those decisions wanting. Indeed, it is hard to understand why the Court exercised its discretionary jurisdiction twice in such a short period when the cases involved technicalities that seemed to overwhelm the generalist justices and when subsequent disputes with similar factual situations would be affected by statutory changes.
Hughes Properties And General Dynamics: The Supreme Court, The All Events Test, And The 1984 Tax Act, Erik M. Jensen
Hughes Properties And General Dynamics: The Supreme Court, The All Events Test, And The 1984 Tax Act, Erik M. Jensen
Faculty Publications
This article discusses United States v. Hughes Properties, a 1986 case in which the Supreme Court blessed an accrual-basis taxpayer's current deduction for amounts guaranteed as payoffs on progressive slot machines but for which no winner had yet been determined. The author notes that, had the case been governed by section 461(h) of the Internal Revenue Code, as it was amended by the 1984 Tax Reform Act, the deductions would have been deferred. He speculates about the Supreme Court's willingness to decide an issue rendered moot by subsequent legislation, and ponders the effect that the decision in Hughes Properties will …