Opinion ID: 1563910
Heading Depth: 1
Heading Rank: 3

Heading: Overlapping Item.

Text: In December, 1920, the taxpayer underestimated its revenues for that month to the extent of $282,555.66. This underestimate was made in good faith following a long continued practice of estimating revenues, which, by their nature, could not be determined at the end of any one month with any degree of exactness. The amount by which the December, 1920, income was underestimated went into the taxpayer's 1921 income. The practice followed by the taxpayer had met with the approval of the Interstate Commerce Commission. It is plain that over a course of years no prejudice could result to the government in the matter of taxes from such a practice. Counsel for the respondent has conceded that the Board erred in requiring an allocation of the amount of the underestimate to income for the year 1920. Section 212 (b) of the Revenue Act of 1918 (40 Stat. 1064), and Article III of Regulations 62 seem to require this concession, since clearly the overlapping items do not materially distort the income, and the policy of the taxpayer with respect to them has been consistent for some twenty-five years.