Matter of West Texas Marketing Corp.

Ever since this circuit decided Fahs v. Martin, 224 F.2d 387 (5th Cir.1955), the settled rule has been that an accrual basis tax*1201payer immediately may deduct, under the Internal Revenue Code, an expense such as interest legally owed, notwithstanding the improbability of payment. Id. at 393. No distinction is made between a debt backed by the full faith and credit of the United States and one owed by a creditor who has not only tottered at the brink of bankruptcy but has fallen into the chasm. The majority today would retreat from our rule in the ease of interest imposed by state law during the…