B. C. Cook & Sons, Inc. v. Commissioner
United States Tax Court
During its taxable year ended Sept. 30, 1965, petitioner corporation discovered that an employee-bookkeeper, through a series of fictitious fruit purchases had embezzled $ 872,212.50 from it over an 8-year period. The amounts embezzled were shown on petitioner's books as additional fruit purchases and included in cost of goods sold.
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During its taxable year ended Sept. 30, 1965, petitioner corporation discovered that an employee-bookkeeper, through a series of fictitious fruit purchases had embezzled $ 872,212.50 from it over an 8-year period. The amounts embezzled were shown on petitioner's books as additional fruit purchases and included in cost of goods sold. Thus petitioner's gross income for each of the taxable years ended Sept. 30, 1958, through Sept. 30, 1965, was reduced and its taxable income decreased by amounts corresponding to the amounts embezzled in each taxable year. In 1965 petitioner recovered $…
1ConcurrenceTannenwald, J.
I start from the premise that it would be entirely proper for us to sustain respondent’s determination on alegal principle not asserted by him.1 In this context, the dissenters are clearly correct in their approach. The only difficulty is that the legal principles upon which their conclusions rest are not applicable to the issue presented herein. This becomes apparent when it is recognized that two different items are involved: (1) Cash for the embezzlement of which a deduction is claimed; and (2) nonexistent purchases which were erroneously taken into the computation of costs of goods sold…
2Cases cited11 opinions
- The Crosley Corporation v. United StatesCourt of Appeals for the Sixth Circuit · 1956
- United States v. KoshlandCourt of Appeals for the Ninth Circuit · 1954
- Mary O'Hara Alsop v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1961
- Waldheim Realty and Investment Company v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1957
- Alsop v. CommissionerUnited States Tax Court · 1960
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