Cir

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

WESTPAC PACIFIC FOOD; SAVE 

MART SUPERMARKETS, INC., TAX

MATTERS PARTNER, No. 02-71041 Petitioners-Appellants, v.  Tax Ct. No. 12400-

COMMISSIONER OF INTERNAL OPINION

REVENUE,

Respondent-Appellee.  Appeal from a Decision of the United States Tax Court

Argued and Submitted September 15, 2004—San Francisco, California

Filed June 21, 2006

Before: James L. Oakes,* Andrew J. Kleinfeld, and Consuelo M. Callahan, Circuit Judges.

Opinion by Judge Kleinfeld

*The Honorable James L. Oakes, Senior Circuit Judge of the United States Court of Appeals for the Second Circuit, sitting by designation.

6885 6888 WESTPAC PACIFIC FOOD v. CIR

COUNSEL

Thomas F. Carlucci, Foley & Lardner, LLP, San Francisco, California, for the appellants.

Audrea R. Tebbets, Department of Justice, Tax Division, Washington, D.C., for the appellee.

OPINION

KLEINFELD, Circuit Judge:

We must decide whether cash paid in advance by a whole- saler to a retailer, in exchange for a volume commitment, is “gross income”…