Shepherd Constr. Co. v. Commissioner
United States Tax Court
Under prime contracts for highway construction, petitioner was entitled to partial payments from the Highway Department of Georgia measured by engineers' monthly estimates of pay items complete in place less a 10-percent retainage. Petitioner, using the accrual method of accounting, did not accrue the retainage as income until final inspection and acceptance of the prime contracts.
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Under prime contracts for highway construction, petitioner was entitled to partial payments from the Highway Department of Georgia measured by engineers' monthly estimates of pay items complete in place less a 10-percent retainage. Petitioner, using the accrual method of accounting, did not accrue the retainage as income until final inspection and acceptance of the prime contracts. Petitioner subcontracted portions of the work, withholding retainage in the same percentage from partial payments made to the subcontractors. Held, petitioner improperly accrued the retainage as an expense at the…
1Opinion of the Court
Dawson, Judge:
Respondent determined deficiencies in income tax for the fiscal years ended on March 31, 1961 and 1962, in the amounts of $62,880.73 and $29,601.05, respectively. Certain minor adjustments for fiscal year 1962 relating to entertainment and sales promotion expenses and to depreciation have not been contested. The issues for decision are (1) whether petitioner, an accrual basis contractor engaged in highway construction, is entitled to deductions for amounts of “retainage” withheld from its subcontractors prior to final acceptance and approval of the work performed, and, if not,…
2Cases cited11 opinions
- United States v. AndersonSupreme Court of the United States · 1926
- Lucas v. American Code Co.Supreme Court of the United States · 1930
- Fruehauf Trailer Co. v. CommissionerUnited States Tax Court · 1964
- Dearborn Gage Co. v. CommissionerUnited States Tax Court · 1967
- Fruehauf Corporation v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1966
6 more not listed; retrieve them via the Exa API.
3Cited by20 opinions
- Electric & Neon, Inc. v. CommissionerUnited States Tax Court · 1971
- Coors v. CommissionerUnited States Tax Court · 1973
- H. F. Campbell Co. v. CommissionerUnited States Tax Court · 1969
- Smith v. CommissionerUnited States Tax Court · 1971
- Western Casualty & Surety Co. v. CommissionerUnited States Tax Court · 1976
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