Court Opinion

ID: 4478964
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:13:23.578221+00
Date Added: 2024-06-11T15:03:33.509021
License: Public Domain

Mttkdock, J., dissenting: Section 41 of the 1939 Code provides that a taxpayer shall file returns in accordance with the method of accounting regularly employed in keeping the books of such taxpayer. The present taxpayer kept its books on an accrual basis of accounting and filed its returns on that basis up to 1953, but then, because of the burden of determining what accounts receivable were uncollectible, it asked permission to change its method of reporting to the cash receipts and disbursements method. This permission was granted. However, the petitioner did not change its bookkeeping methods and records but merely filed returns on the new basis. Nothing in the Commissioner’s permission to file returns on the cash basis authorized any waiver of the section 41 requirement that returns and bookkeeping methods be in accord, nor is it clear that he would have had any authority to give such a waiver had he attempted to do so. It seems to me that the permission granted was and had to be on condition that the petitioner keep books on a cash receipts and disbursements basis if it was going .to file its returns on that basis because that is required by section 41. This is necessary to prevent a too difficult burden in auditing the returns being placed upon the Commissioner. TuRNer, Kern, Naum, Pierce, Atkins, and Scott, JJ., agree with this dissent.