All-Steel Equipment, Inc. v. Commissioner

Taxpayer was engaged in the metal fabricating business in Montgomery, Illinois, in 1962 and 1963, the taxable years in question. Its business consisted of manufacturing and selling metal office furniture. At least since 1928, it has determined inventory costs by including the costs of materials plus the cost of labor, but reflecting no manufacturing overhead. This method of costing inventory is the so-called “prime cost” method. The taxpayer and Commissioner joined issue on whether or not the Government was authorized to require taxpayer to change its method of inventory accounting.…