Permanent Savings & Loan Ass'n v. United States

MEMO DECISION

HOGAN, Chief Judge.

This case involves a claim by the plaintiff that it is entitled to compute deductions for additions to its bad debt reserve by the preferential method set forth in Section 593 of the Internal Revenue Code of 1954.

The plaintiff is a domestic building and loan association. Until 1952 such associations were exempt from federal income tax. In 1951 this complete exemption was repealed and building and loans were brought under and subject to the regular corporate income tax; however, they were allowed a special deduction for additions to bad debt reserves. This…