United States Tenth Circuit

In the government's appeal from the district court's order holding that plaintiff was permitted to use the percentage-of-completion method of accounting under 26 U.S.C. section 460 to report $62 million in income received from the State of New Mexico for warranting a State highway would meet certain performance standards over a specified period of time, the order is reversed where: 1) the percentage-of-completion method of accounting applied only if manufacture, building, installation, or construction was necessary for the taxpayer-s contractual obligations to be fulfilled; and 2) the percentage-of-completion method could not be used to defer tax on income received under a guaranty, warranty, or maintenance agreement.

Appellate Information

• Decided 04/27/2010
• Published 04/27/2010

Judges

• MURPHY, Circuit Judge., Before LUCERO, SEYMOUR, and MURPHY, Circuit Judges.

Court

• United States Tenth Circuit

Counsel

• For Appellees:
  
• Ellen Page DelSole, Attorney, Tax Division, Department of Justice (Lanny Welch, of Counsel, United States Attorney; Marietta Parker, of Counsel, Acting United States Attorney; John A. DiCicco, Acting Assistant Attorney General; Richard Farber, Attorney, Tax Division, Department of Justice; with her on the briefs), Washington, D.C., for Defendant-Appellant., Matthew D. Lerner, Steptoe & Johnson LLP, Washington D.C. (Lisa M. Zarlenga, Steptoe & Johnson LLP, Washington, D.C., and James M. Armstrong, Foulston Siefkin LLP-Wichita, Wichita, KS, with him on the brief), for Plaintiff-Appellee.