Acme Corporation, a manufacturer of industrial cleaners, keeps its books and files its federal income tax returns on the accrual basis. In 2022, the state tax authorities assessed a tax on one of Acme's "super cleaners", claiming that it fell within the definition of taxable "pesticides" under the state's tax law. Acme paid the tax but filed a lawsuit against the state in 2022, arguing that the "super cleaner" in question was not within the scope of the state tax law and sought an injunction against future tax assessments on the "super cleaner". In 2023, while the lawsuit was still pending, Acme made book entries accruing the state tax assessed on the cleaner for that year, which amounted to $50,000 in tax. Acme deducted this amount from its income when filing its 2023 federal income tax return, even though it had not actually paid the tax in 2023 and was still contesting its liability in state court. In late 2024, the state court issued a final order in Acme's favor, permanently enjoining the state tax authorities from assessing the tax on Acme's "super cleaner". In its 2024 federal income tax return, Acme included the $50,000 it had deducted in 2023