B. C. Cook & Sons, Inc. v. Commissioner of Internal Revenue

This is an appeal by the Government from a Tax Court decision in favor of a taxpayer. B. C. Cook & Sons, Inc., 65 T.C. 422 (1975). The Court had previously allowed taxpayer corporation an embezzlement loss deduction for 1965. B. C. Cook & Sons, Inc., 59 T.C. 516 (1972). An embezzlement by an employee had occurred in such a way as to erroneously increase by a portion of the loss the corporation’s cost of goods sold for the years 1958 through 1961. Thus the corporation received a double tax benefit. Its gross income, and ultimately its taxable income, was reduced for the 1958-1961 years because…