Source: https://www.legalcrystal.com/case/95203/aluminum-castings-co-vs-routzahn
Timestamp: 2018-02-24 04:00:46
Document Index: 688903155

Matched Legal Cases: ['§ 13', '§ 12', '§ 13', '§ 13', '§ 12', '§ 13', '§ 13', '§ 13', '§ 13', '§ 12', '§ 13', '§ 13', '§ 13', '§ 12', '§ 13', '§ 13', '§ 12', '§ 12', '§ 13', '§ 12']

Aluminum Castings Co Vs Routzahn - Citation 95203 - Court Judgment | LegalCrystal
Aluminum Castings Co. Vs. Routzahn - Court Judgment
LegalCrystal Citation legalcrystal.com/95203
Case Number 282 U.S. 92
Appellant Aluminum Castings Co.
.....and in the option of the commissioner necessary to determine the correctness of the net income returned and to carry out the provisions of this title." it follows that the return must be filed on the accrual basis under § 13(d), where true income cannot be arrived at on the basis of actual receipts and disbursements. see united states v. anderson, supra, pp. 269 u. s. 437 , 269 u. s. 440 . any other construction of §§ 12(a) and 13(d) would disregard the requirement of § 13(b) and the dominating purpose of the act by enabling the taxpayer to file a return which did not reflect true income. see united states v. mitchell, supra, pp. 271 u. s. 12 -13. it was in recognition of this, and in compliance with § 13(b), that treasury decision.....
Aluminum Castings Co. v. Routzahn - 282 U.S. 92 (1930)
U.S. Supreme Court Aluminum Castings Co. v. Routzahn, 282 U.S. 92 (1930)
1. That the regulations mentioned, which required the use of inventories in proper cases and permitted the deduction of accounts payable when accounts receivable were brought into the income account, were supplementary to the provisions of the earlier Acts, and do not have the effect of classifying items receivable and payable as cash receipts and disbursements when the like provisions of § 12(a) are to be construed with the new provisions, §§ 13(d) and 13(b), of the 1916 Act. P. 282 U. S. 97 .
3. The filing of a return under § 13(d), where the taxpayer is able to comply with its requirements, is optional if he is also able to prepare a return on the basis of actual receipts and disbursements; but if true income cannot be arrived at on the latter basis, the return must be filed on the accrual basis. P. 282 U. S. 98 .
4. A taxpayer's declaration in his income tax return as to whether it is made on the accrual basis or on that of actual receipts and disbursements is not conclusive. P. 282 U. S. 99 .
correctly deducted from gross income in petitioner's tax return for that year. The Commissioner, rejecting this contention, deducted the tax from gross income for 1916, the year when it accrued, see United States v. Anderson, 269 U. S. 422 , and collected a correspondingly increased income and profits tax for 1917, which is involved in the present suit.
This argument is, in substance, that considered and rejected by the Court in United States v. Anderson, supra, p. 269 U. S. 439 . There, as here, the taxpayer's return for 1917 computed income on the basis of inventories and accrued items, payable and receivable, appearing on the taxpayer's books of account for that year, but deducted from gross income the munitions tax, paid in 1917, which had accrued the year before. The return, as made, would have been permissible under the Revenue Acts preceding that of 1916; but it was held that, under that Act, the tax was required to be deducted in the year when it accrued.
But this action of the Department, born of necessity in order to arrive at the income of certain businesses, was neither a classification nor an irrevocable designation of items receivable and payable as cash receipts and disbursements. Although the regulations supplemented the provisions of the statute by providing for a different method of computing income, they did not alter the meaning of its words or preclude acceptance of them at their face value when reenacted in a new legislative setting. Classification took place when § 13(d) was substituted for existing treasury regulations, [ Footnote 1 ] and broadly authorized returns under it by taxpayers "keeping accounts upon any basis other than that of actual receipts and disbursements," a phrase which, in the light of the legislative history, plainly indicates that the returns contemplated by § 13(d) were
to be dealt with as a separate class, distinct from those based on actual receipts and disbursements alone described by § 12(a). [ Footnote 2 ]
By these sections, the filing of a return under § 13(b), where the taxpayer is able to comply with its requirements, is optional if he is also able to prepare a return on the basis of actual receipts and disbursements which reflects true income. But, "notwithstanding the option given taxpayers, it is the purpose of the Act to require returns that clearly reflect taxable income." United States v. Mitchell, 271 U. S. 9 , 271 U. S. 12 . By § 13(b) of the 1916 Act, which was new, the return in every case is required to state such data as are
It follows that the return must be filed on the accrual basis under § 13(d), where true income cannot be arrived at on the basis of actual receipts and disbursements. See United States v. Anderson, supra, pp. 269 U. S. 437 , 269 U. S. 440 . Any other construction of §§ 12(a) and 13(d) would disregard the requirement of § 13(b) and the dominating purpose of the Act by enabling the taxpayer to file a return which did not reflect true income. See United States v. Mitchell, supra, pp. 271 U. S. 12 -13. It was in recognition of this, and in compliance with § 13(b), that Treasury Decision 2433, Jan. 8, 1917, provided with respect to returns made under §§ 12(a) and 13(d):
Petitioner, relying on the declarations in its returns that they were made on the basis of actual receipts and disbursements, contends that, for that reason, they must be deemed made under § 12(a), and not under § 13(d). But whether a return is made on the accrual basis, or on that of actual receipts and disbursements is not determined by the label which the taxpayer chooses to place upon it. The use of inventories and the inclusion in the returns of accrual items of receipts and disbursements appearing on petitioner's books indicate the general and controlling character of the account, Niles Bement Pond Co. v. United States, 281 U. S. 357 , 281 U. S. 360 ; United States v. Anderson, supra, pp. 269 U. S. 442 -443, and support the finding of the trial court that books and returns were on the accrual basis. The record does not disclose that petitioner offered to make a return for 1917 on the basis of actual receipts and disbursements, or that it could have done so. It was therefore competent for the Commission to correct the return for 1917 to conform it to the system of accounting in fact adopted by excluding from its the munitions tax which had accrued in 1916, whether appearing on the books for that year or not. United States v. Detroit
Can Co., 280 U. S. 412 ; United States v. Anderson, supra; Niles Bement Pond Co. v. United States, supra.
Pending the adoption of regulations applicable to the Revenue Act of 1916, Treasury Decision 2367, Sept. 14, 1916, continued existing regulations in force only so far as not inconsistent with the provisions of the 1916 Act. New regulations applicable to §§ 12(a) and 13(d), adopted in Treasury Decision 2433, Jan. 8, 1917, before petitioner filed its 1916 and 1917 returns, are considered infra, p. 282 U. S. 98 .
Gould v. Gould, 245 U. S. 151 , 245 U. S. 153 ; Crocker v. Malley, 249 U. S. 223 , 249 U. S. 233 ; United States v. Field, 255 U. S. 257 , 255 U. S. 262 ; Smietanka v. First Trust & Savings Bank, 257 U. S. 602 , 257 U. S. 606 ; Shwab v. Doyle, 258 U. S. 529 , 258 U. S. 534 ; United States v. Merriam, 263 U. S. 179 , 263 U. S. 188 ; Hecht v. Malley, 265 U. S. 144 , 265 U. S. 156 ; Reinecke v. Northern Trust Co., 278 U. S. 339 , 278 U. S. 348 .
United States v. Anderson, 269 U. S. 422 , differs materially from the present cause upon the facts, and, we think, is not enough to support the conclusion of the court below.