Bay State Gas Co. v. Commissioner

FAIRCHILD, Senior Circuit Judge.

The Tax Court held that in light of the surrounding facts it was an abuse of discretion for the Commissioner to require petitioner gas utility, an accrual basis taxpayer, to accrue as income for a given year charges for gas consumed by its budget billing customers between their December meter reading or estimate dates and December 31, which had not actually been paid for prior to year-end. We affirm the Tax Court’s determination.

I. Factual Background1 and Proceedings

Petitioner, a regulated public utility engaged in the distribution of gas, recognizes income…