Page:United States Statutes at Large Volume 98 Part 1.djvu/647

 PUBLIC LAW 98-369—JULY 18, 1984 •I' <

98 STAT. 599

when economic performance occurs shall be determined under the following principles: "(A)

SERVICES AND PROPERTY PROVIDED TO THE TAX-

PAYER.—If the liability of the taxpayer arises out of— ~ "(i) the providing of services to the taxpayer by an"' other person, economic performance occurs as such person provides such services, "(ii) the providing of property to the taxpayer by another person, economic performance occurs as the person provides such property, or "(iii) the use of property by the taxpayer, economic "tJ*7 ( I ii performance occurs as the taxpa3rer uses such property. "(B)

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SERVICES AND PROPERTY PROVIDED BY THE TAX-

PAYER.—If the liability of the taxpayer requires the taxpayer to provide property or services, economic performance occurs as the taxpayer provides such property or services.

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w Q WORKERS COMPENSATION AND TORT LIABIUTIES OF THE ^ ^

,, TAXPAYER.—If the liability of the taxpayer requires a payV !i, Vt 'i jjjgjj^ ^Q another person and— "(i) arises under any workers compensation act, or "(ii) arises out of any tort, economic performance occurs as the payments to such ' person are made. Subparagraphs (A) and (B) shall not apply to any liability described in the preceding sentence. "(D) OTHER ITEMS.—In the case of any other liability of the taxpayer, economic performance occurs at the time determined under regulations prescribed by the Secretary. "(3) EXCEPTION FOR CERTAIN RECURRING ITEMS.—

"(A) IN GENERAL.—Notwithstanding paragraph (1) an ^.,,,,,^, item shall be treated as incurred during any taxable year

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"(i) the all events test with respect to such item is met during such taxable year (determined without regard to paragraph (1)), "(ii) economic performance with respect to such item occurs within the shorter of— "(I) a reasonable period after the close of such taxable year, or "(II) SVa months after the close of such taxable year, "(iii) such item is recurring in nature and the taxpayer consistently treats items of such kind as incurred in the taxable year in which the requirements of clause (i) are met, and "(iv) either— "(I) such item is not a material item, or "(II) the accrual of such item in the taxable year in which the requirements of clause (i) are met results in a more proper match against income than accruing such item in the taxable year in which economic performance occurs. "(B) FINANCIAL STATEMENTS CONSIDERED UNDER SUBPARAGRAPH (A) (iv).—In making a determination under sub-

paragraph (A)(iv), the treatment of such item on financial statements shall be taken into account.

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