Generally,Section 267 requires that the deduction of unpaid (accrued)expenses be deferred until the year in which the related payee recognizes the amount as income.

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Section 267 of the Internal Revenue Code does require that deductions for unpaid expenses be deferred until the payee recognizes the income. This rule is intended to prevent taxpayers from taking advantage of timing differences to artificially reduce their tax liability.

Generally,Section 267 Requires That the Deduction of Unpaid (Accrued)expenses Be