Kaiser Steel Corporation v. United States

In this action by Kaiser Steel Corporation for refund of federal income taxes allegedly overpaid in 1964, the United States appeals from the judgment rendered in favor of Kaiser Steel.

I.

Kaiser Steel is and was during 1964 engaged in the business of the manufacture and fabrication of steel and related products in California. Pursuant to California Worker’s Compensation Laws, Kaiser Steel was required to provide benefits to its employees with respect to all injuries arising out of and in the course of employment. This obligation was imposed without regard to negligence and with limited statutory exceptions not applicable here. Thus the fact of injury normally established the fact of liability. Three kinds of benefits-were provided: medical treatment cost payments; disability payments; and death awards. In 1964, Kaiser Steel became a self-insurer of all of its worker’s compensation liability.

At all relevant times, Kaiser Steel has used the accrual method of accounting in computing its income. In 1964, it established on its books a reserve to meet its worker’s compensation liability. In its income tax return for 1964, it deducted a figure totaling the amount paid by it during…

specially concurring:

It is clear, as conceded by the United States, that this Court is bound by the earlier decision in Crescent Wharf & Warehouse Co. v. Commissioner, 518 F.2d 772 (9th Cir.1975), that the fact of injury to an employee under California Workman Compensation laws was sufficient to establish the fact of liability, the first prong of the all-events test. Were it not for this fact, I would find myself of the view expressed by the Tax Court in World Airways, Inc. v. CIR, 62 T.C. 786 (1974), subsequently affirmed by this Court at 564 F.2d 886 (9th Cir.1977), after we decided Crescent Wharf. World Airways seems to me to be inconsistent with this Court’s earlier decision in Crescent Wharf.

Once the hurdle of fact of liability has been passed, I concur in the decision of the Court here that we cannot find clearly erroneous the trial court’s determination that the amount to be expended in the future was “established with reasonable accuracy.”

I, therefore, concur.

717 F.2d 1304 83-2 USTC P 9621 KAISER STEEL CORPORATION, Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant. No. 82-4689. United States Court of Appeals, Ninth Circuit. Argued and Submitted Aug. 8, 1983. Decided Oct. 6, 1983. William A. Whitledge, Atty., Washington, D.C., for defendant-appellant. Paul H. Dawes, Thelen, Marrin, Johnson & Bridges, San Francisco, Cal., for plaintiff-appellee. On Appeal from the United States District Court for the Northern District of California. Before TUTTLE, * MERRILL and PREGERSON, Circuit Judges. MERRILL, Circuit Judge. 1 In this action by Kaiser Steel Corporation for refund of federal income taxes allegedly overpaid in 1964, the United States appeals from the judgment rendered in favor of Kaiser Steel. I. 2 Kaiser Steel is and was during 1964 engaged in the business of the manufacture and fabrication of steel and related products in California. Pursuant to California Worker's Compensation Laws, Kaiser Steel was required to provide benefits to its employees with respect to all injuries arising out of and in the course of employment. This obligation was imposed without regard to negligence and with limited statutory…