Court Opinion

ID: 4500263
Source: CourtListenerOpinion
Date Created: 2020-01-23 18:16:50.883643+00
Date Added: 2024-06-11T15:04:31.839218
License: Public Domain

Van Foss an,
dissenting: I am unable to agree with the prevailing opinion in this case that the evidence is insufficient to sustain petitioner’s contention. Although the method employed by petitioner in keeping its books bore some resemblance to an accrual basis, I think it clear that petitioner was attempting to keep its books on a cash *1062receipts and disbursements basis. The mere presence of certain additional records usually indicative of an accrual method of accounting is not, in my judgment, sufficient to warrant the conclusion that in this case petitioner’s books were kept on that basis.
It will scarcely be gainsaid that Congress intended to apply that method of accounting that will most accurately reflect true income. In 1920 petitioner’s sales Avere $218,148.22, while in 1921 they were but $119,051.86. As computed by the Commissioner on the accrual basis, taxes for 1920 amount to $1,342.42, while for 1921, with little over half the sales, taxes amount to $13,697.59. The existence of such a discrepancy in taxes, unless attributable to peculiar express factors, would seem to indicate a gross distortion of income.