Mayfair Minerals, Inc. v. Commissioner of Internal Revenue

The Commissioner of Internal Revenue determined that the amount which taxpayer improperly accrued and deducted, but did not pay in the years 1957 through 1960 as current refunds to its customer, represented taxable income in 1961 when the liability for making the refunds was terminated by an order of the Federal Power Commission. The Tax Court upheld the Commissioner’s determination and rejected taxpayer’s contention that it could only realize income in the years 1957 through 1960, when it improperly took the deductions for contingent refunds, and that since the statute of limitations had run…