JA Dougherty's Sons v. Commissioner of Internal Rev.

JONES, Circuit Judge.

The principal question in this case is whether a corporate taxpayer is entitled to deduct from gross income accruals made within a taxable year for taxes imposed by a statute which, subsequent to the taxable year, was declared unconstitutional. As a result, the taxes were never actually paid. If such accruals may not be deducted, then the taxpayer claims a right, under the Revenue Act of 1936, 26 U.S.C.A.Int.Rev. Acts, page 819 et seq., to a credit commensurate with the accruals in determining its liability for the undistributed profits tax. The facts in the case were…