Court Opinion

ID: 4618169
Source: CourtListenerOpinion
Date Created: 2020-11-21 02:38:03.851617+00
Date Added: 2024-06-11T08:10:35.792185
License: Public Domain

THE FAIR STORE CORPORATION, SUCCESSOR TO THE FAIR NO. 37, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Fair Store Corp. v. CommissionerDocket No. 14121.United States Board of Tax Appeals11 B.T.A. 1033; 1928 BTA LEXIS 3668; May 4, 1928, Promulgated *3668  An arbitrary charge-off in order to balance books is not sufficient in and of itself to entitle petitioner to a deduction as a loss.  M. A. Matlock, Esq., for the petitioner.  T. M. Mather, Esq., for the respondent.  TRAMMELL *1033  This is a proceeding for the redetermination of a deficiency in income and profits taxes for 1921 in the amount of $291.19.  The deficiency results from the action of the respondent in disallowing a deduction claimed by the petitioner representing an arbitrary charge-off on the books during the taxable year.  FINDINGS OF FACT.  The Fair No. 37 during the taxable year was a small general store doing a cash business so far as its sales are concerned.  It had a poor system of accounting and did not have an experienced bookkeeper.  At the end of 1921 the petitioner, in order to make the books of the corporation balance, charged off an arbitrary amount of $634.08 which can not be allocated to any specific account or to any specific transaction.  OPINION.  TRAMMELL: There is no evidence in this case that the petitioner actually had a loss.  The only evidence is that the books and accounts *1034  were out of*3669  balance to the extent of $634.08 and that amount was arbitrarily charged off to balance the books and accounts.  Such a transaction does not constitute a deductible loss.  . Judgment will be entered for the respondent.