“Whether the Federal Circuit correctly determined the proper time for deduction by an accrual basis taxpayer engaged in the business of gaming of an expense represented by its unpaid liability for progressive slot machine jackpots.”
“The Court of Appeals for the Federal Circuit affirmed the judgment ‘on the basis of the United States Claims Court opinion.’ It ruled that, under the accrual method of accounting, an expense is deductible in the tax year in which all the events have occurred that determine the fact of liability and the amount thereof can be determined with reasonable accuracy, and that liability exists ‘if there is an obligation to perform an act and the cost of performance can be measured in money.’ The liability here was not contingent upon the time of payment or the identity of the jackpot winner. . . . We agree with the Claims Court and with the Federal Circuit . . . .”
