Thriftimart, Inc. v. Commissioner
United States Tax Court
Held: 1. Petitioner, an accrual basis taxpayer, which is a self-insurer under the CaliforniaWorkmen's Compensation law is not entitled to deduct a reserve for estimated liability to injured employees, since all events fixing liability had not occurred and the amount of such liability is not reasonably ascertainable at the end of the taxable year. 2. Petitioner is entitled to deduct an accrual for nonforfeitable sick pay which it will be required to pay to employees for…
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Held: 1. Petitioner, an accrual basis taxpayer, which is a self-insurer under the CaliforniaWorkmen's Compensation law is not entitled to deduct a reserve for estimated liability to injured employees, since all events fixing liability had not occurred and the amount of such liability is not reasonably ascertainable at the end of the taxable year. 2. Petitioner is entitled to deduct an accrual for nonforfeitable sick pay which it will be required to pay to employees for unused sick leave in the coming year but is not entitled to deduct as an accrued expense, amount for current year's sick pay…
1Opinion of the Court
Scott, Judge:
Respondent determined deficiencies in petitioner’s Federal income taxes for the years and in the amounts as follows:
52-5S weeh year ended Amount
Mar. 27,1965_ $353,377
Mar. 26, 1966_ 115,412
Some of the issues raised by the pleadings have been disposed of by agreement of the parties, leaving for our decision the following:(1) Whether petitioner, a self-insurer under the California Workmen’s Compensation Insurance Act, properly deducted as an accrued expense at the close of each of its fiscal years an amount the administrator of the workmen’s compensation insurance program estimated…
2Cases cited28 opinions
- New Colonial Ice Co. v. HelveringSupreme Court of the United States · 1934
- United States v. AndersonSupreme Court of the United States · 1926
- Lucas v. American Code Co.Supreme Court of the United States · 1930
- Brown v. HelveringSupreme Court of the United States · 1934
- Maryland Casualty Co. v. United StatesSupreme Court of the United States · 1920
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