461 (f) and the related regulations provide rules for the timing of deductions for contested liabilities.
A contested liability arises when a taxpayer refuses to admit liability to pay an amount claimed.
The rules provide an exception if the contested liability requires a payment to another person and arises under a workers' compensation act or under any tort.
The DSF provisions do not apply with respect to any liability of the taxpayer arising under any workers' compensation act or a contested liability under Sec.
The contested liabilities rules are complex and the interpretations of what constitutes a transfer of money or other property to provide for the satisfaction of an asserted liability are strict.