Court Opinion

ID: 9444439
Source: CourtListenerOpinion
Date Created: 2023-08-03 21:00:58.662095+00
Date Added: 2024-06-11T17:29:52.314133
License: Public Domain

BRATTON, Circuit Judge
(dissenting).
The taxpayer received the funds representing prepaid subscriptions under claim of right without any restrictions in respect to their use. The funds were placed in the capital structure of the taxpayer with no limitations or proscriptions upon their application, enjoyment, or disposition. The taxpayer was required to make refunds in case of cancellations of prepaid subscriptions, but that obligation was contingent. It depended entirely upon whether cancellations were made. Unless a subscription should be cancelled no refund would be made. It seems clear to me that under the settled law in force at the time, the entire amount received for prepaid subscriptions constituted income returnable for the year in which it was received, even though the taxpayer kept its books and made its returns on the accrual basis. Brown v. Helvering, 291 U.S. 193, 54 S.Ct. 356, 78 L.Ed. 725; South Dade Farms v. Commissioner, 5 Cir., 138 F.2d 818; Clay Sewer Pipe Association v. Commissioner, 3 Cir., 139 F.2d 130; Capital Warehouse Co. v. Commissioner, 8 Cir., 171 F.2d 395. And therefore I would affirm the decision of the Tax Court.