In the case of Commissioner of Internal Revenue v. Portland Cement Company of Utah, 1980, the U.S Supreme Court ruled in favor of the Commissioner. The issue at hand was whether or not a taxpayer could deduct from its gross income an estimated amount for future reclamation expenses associated with current mining operations under section 611 and 612 of the Internal Revenue Code. The court held that such deductions were not permissible because they did not meet the "all events test" which requires all events to have occurred that establish fact and amount liability before a deduction can be taken into account. This decision clarified tax law by asserting that potential future liabilities cannot be deducted from present taxable income.

In the dissenting opinion for Commissioner of Internal Revenue v. Portland Cement Company of Utah, Justice Blackmun argued that the majority's decision was inconsistent with both tax law and general accounting principles. He contended that the Court had failed to properly apply section 471 of the Internal Revenue Code, which requires inventories to be valued at cost unless market value is lower. According to him, this provision should have been interpreted in a way consistent with generally accepted accounting principles (GAAP), which would allow companies like Portland Cement Company to include overhead costs in their inventory valuations. By not doing so, he believed that the Court had effectively allowed taxpayers to manipulate their taxable income by selectively including or excluding certain costs from their inventory calculations. This could lead to significant disparities between economic reality and reported income for tax purposes.