Court Opinion

ID: 9444304
Source: CourtListenerOpinion
Date Created: 2023-08-03 20:55:49.781343+00
Date Added: 2024-06-11T17:29:48.308509
License: Public Domain

MILLER, Circuit Judge
(dissenting).
I am not in agreement with my associates in their view that the “Gross profit” of $7,000.47 reported by the taxpayer is to be considered a statement of his “gross income” for the purposes of Section 275(c) Internal Revenue Code. Gross income for this type of taxpayer is defined by Sec. 29.22(a)-5, Treasury Regulations III as the total sales, less the cost of goods sold, without subtracting depreciation, selling expenses or losses. The tax return shows on its face that the reported “Gross profit” of $7,-000.47 is not the same as “gross income” but is the result of deducting from total receipts of $67,105.95 not only the cost of goods sold but also an item of $25,-869.98 (item 6 of Schedule C) which should not be deducted in determining gross income. The failure of the tax form to provide a place where gross income could be specifically stated does not authorize the Commissioner to treat “gross profit” the same as “gross income.” “Gross income” can be correctly determined from the figures shown in Schedule C of the return, which is the same schedule showing “gross profit.” See Uptegrove Lumber Co. v. Commissioner of Internal Revenue, 3 Cir., 204 F. 2d 570.
When so determined the three-year statute of limitations is applicable instead of the five-year statute.