Smith v. Commissioner
United States Tax Court
In early 1968 petitioner completed the work which he had undertaken under a subcontract involving the construction of an overpass, and in March 1968 he submitted his final bill for payment. During 1968 the prime contractor paid petitioner $ 209,896.17 of the agreed contract price but refused to pay the remaining $ 18,000, claiming an offset for the cost of some of the prime contractor's materials allegedly used in completing the work.
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In early 1968 petitioner completed the work which he had undertaken under a subcontract involving the construction of an overpass, and in March 1968 he submitted his final bill for payment. During 1968 the prime contractor paid petitioner $ 209,896.17 of the agreed contract price but refused to pay the remaining $ 18,000, claiming an offset for the cost of some of the prime contractor's materials allegedly used in completing the work. On May 1, 1970, petitioner brought suit against the prime contractor for $ 18,000, and on Jan. 12, 1972, the prime contractor counterclaimed for $ 25,000. On…
1Opinion of the Court
Featherston, Judge:
Respondent determined a deficiency in the amount of $1,861.19 in petitioners’ Federal income tax for 1968. Due to concessions by the parties, the sole issue for decision is whether, under the completed contract method of accounting, petitioners were required to report as income in 1968 the profit from a long-term subcontract where, during that taxable year, a dispute arose between petitioner Charles G. Smith and the prime contractor over a portion of the subcontract price.
FINDINGS OF FACT
Petitioners Charles G. Smith and Margaret M. Smith, husband and wife, resided in…
2Cases cited6 opinions
- Thompson-King-Tate, Inc., a Kentucky Corporation v. United StatesCourt of Appeals for the Sixth Circuit · 1961
- E. E. Black, Limited v. AlsupCourt of Appeals for the Ninth Circuit · 1954
- Vang v. LewellynCourt of Appeals for the Third Circuit · 1929
- C. H. Leavell & Co. v. CommissionerUnited States Tax Court · 1969
- Mesta Machine Co. v. CommissionerUnited States Board of Tax Appeals · 1928
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- Guy F. Atkinson Co. v. CommissionerUnited States Tax Court · 1984
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