Contested liabilities
If—
(1)#
the taxpayer contests an asserted liability,
(2)#
the taxpayer transfers money or other property to provide for the satisfaction of the asserted liability,
(3)#
the contest with respect to the asserted liability exists after the time of the transfer, and
(4)#
but for the fact that the asserted liability is contested, a deduction would be allowed for the taxable year of the transfer (or for an earlier taxable year) determined after application of subsection (h),
then the deduction shall be allowed for the taxable year of the transfer. This subsection shall not apply in respect of the deduction for income, war profits, and excess profits taxes imposed by the authority of any foreign country or possession of the United States.