Burlington N. R. Co. v. Commissioner
United States Tax Court
Petitioner, a calender year taxpayer using the accrual method of accounting, is a railroad engaged in interstate commerce. Under the provisions of the Railroad Retirement Tax Act (RRTA), railroads are required, inter alia, to pay RRTA taxes. Petitioner accrued and deducted such taxes on wages earned during 1974 and 1975 but not payable until 1975 and 1976, respectively.
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Petitioner, a calender year taxpayer using the accrual method of accounting, is a railroad engaged in interstate commerce. Under the provisions of the Railroad Retirement Tax Act (RRTA), railroads are required, inter alia, to pay RRTA taxes. Petitioner accrued and deducted such taxes on wages earned during 1974 and 1975 but not payable until 1975 and 1976, respectively. The parties agree that as of the close of each of the taxable years in question, petitioner was able to compute the amount of such accrued RRTA taxes with reasonable accuracy. Held, petitioner may deduct its accrued RRTA taxes…
1Opinion of the Court
OPINION
Cohen, Judge:
In a statutory notice of deficiency dated March 21, 1980, respondent determined deficiencies in petitioner’s Federal income taxes for 1974 and 1975 in the amounts of $538,940.21 and $943,047.86, respectively. After concessions, the sole issue for determination is whether petitioner, a calendar year accrual basis taxpayer, may accrue and deduct in 1974 and 1975 the employer’s portion of Railroad Retirement Tax Act taxes on yearend salaries where the salaries were properly accruable in those years, but the salaries and taxes thereon were not payable until 1975 and 1976,…
2Cases cited13 opinions
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