United States v. General Dynamics Corp. et al. (481 U.S. 239)
U.S. Supreme Court · decided April 22, 1987 · Supreme Court Database (Spaeth)
- Citation
- 481 U.S. 239 · 107 S. Ct. 1732
- Decided
- April 22, 1987
- Term
- October Term 1986
- Vote
- 6–3
- Majority author
- Justice Marshall
- Issue area
- Federal Taxation
- Disposition
- Reversed
- Outcome
- Petitioning party won
- Ideological direction
- Liberal
Opinion excerpt
<opinion type="majority"> <author id="b300-10">Justice Marshall</author> <p id="Aqr">delivered the opinion of the Court.</p> <p id="b300-11">The issue in this case is whether an accrual-basis taxpayer providing medical benefits to its employees may deduct at the close of the taxable year an estimate of its obligation to pay for medical care obtained by employees or their qualified dependents during the final quarter of the year, claims for which have not been reported to the employer.</p> <p id="AvH"><page-number citation-index="1" label="241">*241</page-number>H-t</p> <p id="b301-3">Taxpayers, respondents herein, are the General Dynamics Corporation and several of its wholly owned subsidiaries (General Dynamics).<footnotemark>1</footnotemark> General Dynamics uses the accrual method of accounting for federal tax purposes; its fiscal year is the same as the calendar year. From 1962 until October 1, 1972, General Dynamics purchased group medical insurance for its employees and their qualified dependents from two private insurance carriers. Beginning in October 1972, General Dynamics became a self-insurer with regard to its medical care plans. Instead of continuing to purchase insurance from outside carriers, it undertook to pay medical claims out of its own funds, while continuing to employ private carriers to administer the medical care plans.</p> <p id="b301-4">To receive…
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