H. A. Carey Co. v. Commissioner
United States Tax Court
Petitioner operates an insurance agency. It kept its books on an accrual method and returned its income in accordance with that method. During the years 1930 to 1952, inclusive, it made bookkeeping errors, the effects of which were to overstate gross income and understate accounts payable in the aggregate amount of $ 23,140.73. In 1953, petitioner discovered its error and made an adjusting entry reducing its gross income and increasing its accounts payable by that amount.
Read the full summary
Petitioner operates an insurance agency. It kept its books on an accrual method and returned its income in accordance with that method. During the years 1930 to 1952, inclusive, it made bookkeeping errors, the effects of which were to overstate gross income and understate accounts payable in the aggregate amount of $ 23,140.73. In 1953, petitioner discovered its error and made an adjusting entry reducing its gross income and increasing its accounts payable by that amount. Petitioner returned the reduced amount as gross income. Respondent increased petitioner's gross income by the same amount.…
1Opinion of the Court
OPINION.
Black, Judge:
The petitioner operates an insurance agency. It keeps its books on an accrual method and returns its income in accordance with its books. The difference between the premium which is due from the insured to whom it sells an insurance policy, and the amount which is due to the insurer, who issues the policy, represents its commission. It returns tírese commissions as gross income. The insurers regulary audit the accounts between them and petitioner. Adjustments of the amounts due from petitioner to the insurers (because of cancellation, rate change, etc.) are usually made.…
2Cases cited5 opinions
- North American Oil Consolidated v. BurnetSupreme Court of the United States · 1932
- Burnet v. Sanford & Brooks Co.Supreme Court of the United States · 1931
- Security Flour Mills Co. v. CommissionerSupreme Court of the United States · 1944
- United States v. LewisSupreme Court of the United States · 1951
- J. E. Mergott Co. v. CommissionerCourt of Appeals for the Third Circuit · 1949
3Cited by3 opinions
- Dell v. CommissionerUnited States Tax Court · 1995
- H. A. Carey Co. v. CommissionerUnited States Tax Court · 1957
- Hursey v. CommissionerUnited States Tax Court · 1987