Schuster's Express, Inc. v. Commissioner
United States Tax Court
Petitioner, an accrual basis taxpayer, maintained some of its expense accounts on an estimated basis for monthly reporting purposes. Such estimates were also used by petitioner in computing expense deductions claimed on its Federal income tax returns for the taxable years ended June 30, 1966, through June 30, 1970. The balance of a reserve account was increased each year by the amount by which the estimates exceeded actual cash expenditures for such items during the year.
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Petitioner, an accrual basis taxpayer, maintained some of its expense accounts on an estimated basis for monthly reporting purposes. Such estimates were also used by petitioner in computing expense deductions claimed on its Federal income tax returns for the taxable years ended June 30, 1966, through June 30, 1970. The balance of a reserve account was increased each year by the amount by which the estimates exceeded actual cash expenditures for such items during the year. Respondent determined that petitioner's accounting practice did not clearly reflect income and disallowed the deductions…
1Opinion of the Court
Goffe, Judge:
The Commissioner determined the following deficiencies in petitioner’s Federal income tax:
TYEJune30— Deficiency
1967_ $20,405.28
1968_ 57,920.83
1969_ 10,702.00
Concessions having been made by petitioner, the principal issues for decision are whether respondent’s change in petitioner’s accounting treatment of insurance expense constitutes a “change in method of accounting” within the meaning of section 481 of the Internal Revenue Code of 1954;1 and, if so, whether respondent correctly adjusted petitioner’s taxable income for the taxable year ended June 30,1968.
FINDINGS OF FACT
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2Cases cited17 opinions
- Estate of Horvath v. CommissionerUnited States Tax Court · 1973
- United States v. CattoSupreme Court of the United States · 1966
- Commissioner of Internal Revenue v. Chelsea Products, IncCourt of Appeals for the Third Circuit · 1952
- Rubin v. CommissionerUnited States Tax Court · 1971
- Graff Chevrolet Company v. Ellis Campbell, Jr., District Director of Internal RevenueCourt of Appeals for the Fifth Circuit · 1965
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3Cited by66 opinions
- Southern Pacific Transp. Co. v. CommissionerUnited States Tax Court · 1980
- Foster v. Comm'rUnited States Tax Court · 1983
- Knight-Ridder Newspapers, Inc. v. United StatesCourt of Appeals for the Eleventh Circuit · 1984
- Wayne Bolt & Nut Co. v. CommissionerUnited States Tax Court · 1989
- Fox Chevrolet, Inc. (Maryland) v. CommissionerUnited States Tax Court · 1981
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