Rose Ella Roybark v. United States of America, Norman Roybark v. United States

In these consolidated cases, appellants, husband and wife brought suit to recover deficiency assessments levied against them for the years 1945 and 1946. During the years involved appellant Norman Roybark was a used car dealer. After income tax returns for said years had been filed, the Government learning that Mr. Roybark had bought and sold automobiles for amounts in excess of the maximum ceiling schedule, investigated his affairs. Records were made available by appellants which showed cars bought and sold, however, such records reflected only legal ceiling prices. Information concerning over ceiling receipts and disbursements had been kept separately, but such records were not produced. In this situation the agent estimated the amount paid for automobiles in excess of ceiling prices. Deficiency assessments were made on these amounts, based on the now discarded theory that the amounts so paid were not allowable as cost in determining the cost of sales.

Appellants contended in the lower court, as they do here, that the burden of proof to justify retention of the taxes on any theory other than that upon which the assessment was made, was on the Government. Helvering v. Taylor,…