Poirier & McLane Corporation v. Commissioner of Internal Revenue

IRVING R. KAUFMAN, Chief Judge:

In 1964, Congress enacted § 461(f) of the Internal Revenue Code to achieve a more equitable and rational matching of liability disbursements and receipts for accrual basis taxpayers. It permitted deduction of a liability, even if contested, provided a transfer was made in that tax year to satisfy the claimed liability. The Internal Revenue Service, to effectuate the statutory intent and avoid potential abuse, promulgated Regulation 1.461-2(c)(l)(ii). It permitted a taxpayer to obtain a deduction by transferring money:. to an escrowee or trustee pursuant to a…