Tull & Gibbs, Inc. v. United States

This was an action to recover overpayments of income and excess profits taxes for the year 1919. A demurrer to the amended complaint was sustained by the court below,, and, from a judgment of dismissal, the plaintiff has appealed.

The following statement is deemed sufficient to a proper understanding of the questions presented for decision: During the years 1917, 1918, and 1919 the appellant sold furniture and household goods on the installment plan, reserving title to the property sold until the last installment of the purchase price was.paid in full. During these years it returned its annual net income on the straight accrual basis, in accordance with regulations prescribed by the Commissioner of Internal Revenue; that is, each year it reported the entire profits on all installment sales made during the year, regardless of whether the installments were paid within the year or later. Between 1919 and 1924 numerous regulations were promulgated from time to time by the Commissioner of Internal Revenue prescribing rules for computing income on installment sales. The substance of these rules was:

January 4, 1924, a further regulation was promulgated providing:

March 12, 1925, the…