Deakman-Wells Co., Inc. v. Commissioner of Internal Revenue

MARIS, Circuit Judge.

In this case the court is asked to review a decision of the Tax Court. The facts are these. Taxpayer, a corporation organized under the laws of the state of New Jersey, was engaged in the business of constructing buildings. Since its incorporation, taxpayer has kept its books of account on the accrual basis but has filed its federal income tax returns on the cash basis. The accrual method of accounting clearly reflected the net income of taxpayer for each of the taxable years involved and taxpayer’s net income should have been computed and reported in its returns in…