Grynberg v. Commissioner

Grynberg (plaintiff) held oil and gas leases with delay clauses requiring an annual fee if drilling did not occur, payable in each lease's anniversary month or the lease would revert. For leases with anniversaries from January through March, Grynberg prepaid the delay-clause fee the prior December and deducted those payments on that earlier year's cash-basis tax return; the Commissioner (defendant) determined the February and March payments should instead be deducted in the year they were actually due, and Grynberg petitioned the Tax Court for a redetermination.