The petitioner, an accrual method taxpayer, operated the Chicago White Sox professional baseball franchise using a fiscal year for federal income tax purposes.

Must the taxpayer include in gross income for 1962 the sale of proceeds received from tickets allocable to games to be played in 1963?

Despite the general rule that requires accrual method taxpayers to include advance payments in the year of receipt, the court carved out a narrow exception for taxpayers such as the petitioners, who are able to prove that services will be performed on fixed dates in one or more subsequent taxable years.

However, the Supreme Court trilogy[3] ending with Schlude[2] required inclusion of prepayments in gross income because of the uncertainties as to when, or if, performance would occur.

The Court found that the deferred income was attributable to games that were intended to be played on a fixed schedule and that notwithstanding rain delays there was certainty about when services would be performed.