C. P. Ford & Co. v. Commissioner
United States Board of Tax Appeals
A taxpayer adopting the reserve method of treating bad accounts may not deduct as an addition thereto an amount in excess of that necessary to maintain a reserve commensurate with the taxpayer's experience and prospects at the time the addition is made; and an allowance by the Commissioner for a prior year does not bind the Commissioner to approve the method by which the amount was computed if such method results in an unreasonable addition for the year in question.
1Opinion of the Court
*158OPINION.
Steknhagen :
The petitioner complains because the respondent has determined that there is no reasonable ground for any addition to its reserve for bad debts and has therefore disallowed the entire deduction taken. It argues that the amount was determined by the method which was used to arrive at the deductions previously allowed, that the method is “ scientific,” and that since, in the opinion of its officers, it is a reasonable amount, its deduction may not be dissallowed.
The effective statute is section 23 (j), Eevenue Act of 1928, which allows the deduction of “Debts ascertained to…
2Cases cited1 opinion
- Blair v. Oesterlein MacHine Co.Supreme Court of the United States · 1927
3Cited by36 opinions
- James A. Messer Co. v. CommissionerUnited States Tax Court · 1972
- Roanoke Vending Exchange, Inc. v. CommissionerUnited States Tax Court · 1963
- Georgia Fed. Bank, F.S.B. v. CommissionerUnited States Tax Court · 1992
- Farmville Oil & Fertilizer Co. v. CommissionerUnited States Board of Tax Appeals · 1934
- Miners Nat'l Bank v. CommissionerUnited States Tax Court · 1959
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