Food Machinery & Chemical Corp. v. United States

Littleton, Judge (Bet.),

delivered the opinion of the court:

Plaintiff, an accrual basis taxpayer, sues to recover income and excess profits taxes paid for its fiscal year ended September 30, 1945 (hereinafter called fiscal 1945). The taxes in question, in the amount of $744,548.35, were paid upon a profit allowance of $906,621.81 received by plaintiff on a contract termination claim which was actually paid in 1946 and 1947. The issue in the case is whether plaintiff was properly required by the Commissioner of Internal Revenue to accrue this sum as income for fiscal 1945, when its contract was…