Sealy Corporation v. Commissioner of Internal Revenue’s Empirical Analysis

Citation profile

Most-quoted passages

The sentences later courts lift from this opinion, ranked by how many decisions quote each — the parts of the opinion doing the work. These counts are smaller than the citation total above because most of the 4 citing decisions cite the case generally; a passage count includes only decisions quoting that exact language verbatim.

1. “It is, therefore, not simply an expense incurred with respect to an obligation under federal law but an act “giving rise” to the liability that qualifies as a specified liability under the statute. The act giving rise to each of the liabilities in question was the contractual act by which Sealy engaged lawyers or accountants. In each of these instances the act did not occur at least three years before the beginning of the taxable year. Sealy’s argument essentially is that the act giving rise to the liability is the first event in a chain of causes which gives rise to the liability. The argument leads to a reductio ad absurdum. The organization of the company gave rise to an obligation to comply with all pertinent state and federal laws and thereby gave rise to the liabilities incurred in complying with these laws. According to this logic, every corporation would have a specified liability carryback for all costs the corporation incurred to comply with relevant laws. Congress did not create such a windfall. [Sealy Corp. v. Commissioner, 171 F.3d at 657-658.]”

   2 later decisions quote this exact passage · from the majority
   e.g. Standard Brands Liquidating Creditor Trust v. United States · Intermet Corp. v. Comm'r

2. “[Tjhose provisions do not establish petitioners’ liability to pay the amounts at issue. Petitioners’ liability to pay those amounts did not arise until petitioners contracted for and received the services. Petitioners’ choice of the means of compliance, and not the regulatory provisions, determined the nature and amount of their costs.”

   2 later decisions quote this exact passage · from the majority
   e.g. Standard Brands Liquidating Creditor Trust v. United States · In Re Harvard Industries, Inc.

3. “Any amount (not described in subpara-graph (A)) allowable as a deduction under this chapter with respect to a liability which arises under a Federal or State law or out of any tort of the taxpayer if— (I) in the case of a liability arising out of a Federal or State law, the act (or failure to act) giving rise to such liability occurs at least 3 years before the beginning of the taxable year, or (ii) in the case of a liability arising out of a tort, such liability arises out of a series of actions (or failures to act) over an extended period of time a substantial portion of which occurs at least 3 years before the beginning of the taxable year. A liability shall not be taken into account under subparagraph (B) unless the taxpayer used an accrual method of accounting throughout the period or periods during which the acts or failures to act giving rise to such liability occurred.”

   1 later decision quote this exact passage · from the majority
   e.g. In Re Harvard Industries, Inc.