Maroosis

On May 1, 1944, in conformity with Title 26 U.S.C.A. § 2800 (k), which imposes floor stock taxes on distilled spirits, the taxpayer herein, Nick W. Maroosis, filed his return and paid the taxes in accordance therewith to James G. Smyth, United States Collector of Internal Revenue for the district. The return reported 1330.36 proof gallons of distilled spirits on hand on April I, 1944, the tax date. The Collector found an underdeclaration of floor stocks and fraud in the return, readjusted the tax due upward and assessed a penalty. The taxpayer paid in accordance with the Collect- or’s findings and brought suit in district court for refund. The district court found in accordance with the Collector’s determination, and taxpayer appealed.

Disbelieving the amount of floor stocks reported by the taxpayer the Collector caused his agents to take a physical inventory of the stocks in appellant’s store as of May 2, 1944, and the result was adjusted back to April 1, 1944. On comparison with taxpayer’s inventory it was revealed that the taxpayer’s inventory, if it could be relied upon, had overdeclared the floor stocks in the amount of 198.98 proof gallons.

The Collector was not satisfied…