J.F. Johnson Lumber Co. v. Commissioner
United States Tax Court
A taxpayer used the reserve method of accounting for bad debts and consistently included in gross income and did not credit to the reserve recoveries of debts which had been charged off against the reserve in prior years.
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A taxpayer used the reserve method of accounting for bad debts and consistently included in gross income and did not credit to the reserve recoveries of debts which had been charged off against the reserve in prior years. Held, under section 711 (a) (1) (E), Internal Revenue Code, recoveries in 1941 and 1942 of debts charged off and deducted in years prior to 1940 are excluded from excess profits tax net income for the year of recovery and the section is not inapplicable to taxpayers regularly using the reserve method of accounting for bad debts. Regulations 109, sec. 30.711 (a)-2, to the…
1Opinion of the Court
OPINION.
Sternhagen. Judge-.
The Commissioner, in determining the taxpayer’s excess profits tax, has refused to exclude from excess profits tax net income of the tax years, the amount of recoveries of debts which were charged off as bad debts in years prior to 1940. This holding was based on Regulations 109, section 30.711 (a)-2, providing that section 711 (a) (1) (E), Internal Revenue Code,1 is not applicable to a taxpayer using the reserve method of treating bad debts.
The statute is clear and unambiguous, and its directions are specific. Therefore there is no power to amend it by regulation.…
2Cases cited2 opinions
- Koshland v. HelveringSupreme Court of the United States · 1936
- Ohio Loan & Discount Co. v. CommissionerUnited States Tax Court · 1944
3Cited by13 opinions
- McCamant v. CommissionerUnited States Tax Court · 1959
- A B C Brewing Corp. v. CommissionerUnited States Tax Court · 1953
- Boyd-Richardson Co. v. CommissionerUnited States Tax Court · 1945
- Ralphs-Pugh Co. v. CommissionerUnited States Tax Court · 1946
- Beneficial Industrial Loan Corp. v. CommissionerUnited States Tax Court · 1946
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