We reach this conclusion, because section 461(d) requires that, in the case of accrual basis taxpayer, to the extent any action of a taxing jurisdiction taken after December 31, 1960, accelerates the time for accruing
a tax liability, then such taxes shall be treated as accruing
at the time they would have accrued but for such action of the taxing jurisdiction.
The threshold for not accruing
income is more substantial than in those situations in which income is accrued and a comparable bad-debt chargeoff is recorded.
Therefore, even though a corporation may have properly planned for the unrealized built-in gain with respect to its receivables by accruing
additional compensation to its shareholder-employees to offset it, the recognized built-in gain from these receivables becomes inflated on collection.
Amending plans: Employers should carefully consider the consequences of modifying existing deferred compensation plans to obtain current rather than deferred deductions for interest accruing
on the compensation.
In addition, GTS announced that it has amended the indenture to provide for payment of interest accruing
from January 15, 2000, to but not including the redemption date to any holder of bonds that converts prior to the redemption date.
Since 1982, however, the IRS's position, as expressed in GCM 38864, has been that only rehabilitation deductions and losses excluded from the definition of built-in deductions are those economically accruing
in postaffiliation years.
871(a)(1)(C)(i) or 881(a)(3)(A), tax is imposed on the amount of OlD accruing
while such obligation was held by the foreign investor who receives the retirement proceeds.