Challenge Publications, Inc. v. Commissioner Internal Revenue Service

WIGGINS, Circuit Judge:

Appellant, Challenge Publications, Inc. (“Challenge”), appeals the Tax Court’s decision affirming $2,560,368 in deficiencies imposed by the Commissioner for the tax years 1972 through 1976. The Tax Court ruled that Challenge could not accrue as a deductible business expense an estimate for unsold magazines that it anticipated would be returned. Appellant claims that this practice satisfies the “all events” test or, alternatively, comports with established industry standards. We affirm.

BACKGROUND

The facts of this case are not seriously in dispute, and have been largely…