Budget Credits, Inc. v. Commissioner of Internal Revenue

The Commissioner of Internal Revenue assessed income tax deficiencies totalling $100,024.98 against appellant taxpayer for the fiscal years ending July, 1960 through 1963. These deficiencies resulted from the Commissioner’s disallowance of certain additions to taxpayer’s reserve for bad debts during the years in question. The Tax Court, two judges dissenting, upheld the Commissioner’s assessments, and it is from that decision taxpayer appeals. 1

There is no dispute about the facts, all of which were stipulated. Taxpayer is a wholly-owned subsidiary of Federal’s, Inc. Federal’s operates a…