Advance Truck Company, a Corporation v. Commissioner of Internal Revenue

The question presented by this petition for review of a decision of the Tax Court of the United States is whether petitioner’s income for federal income tax purposes for the year 1950 is to be computed according to the straight accrual method of accounting, or by a method of accounting which is partly cash receipts and disbursements and partly accrual.

Specifically, the problem is whether amounts received by the petitioner in 1950 for services rendered in 1949 are in-cludable in 1950 income.

The facts are not in dispute, and may be summarized from the stipulations of facts before the Tax Court.

Petitioner is a California corporation, which was organized in 1932. Since its incorporation it has engaged as a common carrier in hauling and storing tubular goods for hire. It is not engaged in manufacturing, processing, purchasing or selling merchandise. Its business has not required the use of inventories and inventories are not an income producing factor.

From the date of its incorporation through December 31, 1949, petitioner properly kept its books of account and properly reported its income for federal income tax purposes on the cash receipts and disbursements method.

On…