Hachette Usa, Inc., as Successor to Hachette Publications, Inc., and Curtis Circulation Co., Subsidiary v. Commissioner of Internal Revenue

Second Circuit

Hachette Usa, Inc., as Successor to Hachette Publications, Inc., and Curtis Circulation Co., Subsidiary v. Commissioner of Internal Revenue

87 F.3d 43

CourtCourt of Appeals for the Second Circuit

DecidedJune 21, 1996

Docket1427, 1732, Dockets 96-4014(L), 96-4015CON

StatusPublished

Cited by7 cases

This text of 87 F.3d 43 (Hachette Usa, Inc., as Successor to Hachette Publications, Inc., and Curtis Circulation Co., Subsidiary v. Commissioner of Internal Revenue) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Hachette Usa, Inc., as Successor to Hachette Publications, Inc., and Curtis Circulation Co., Subsidiary v. Commissioner of Internal Revenue, 87 F.3d 43 (2d Cir. 1996).

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Opinion

PER CURIAM:

Hachette USA, Inc. and its subsidiary, Curtis Circulation Co. (collectively “Hachette”), appeal from the decision of the Tax Court (David Laro, Judge) entered October 30, 1995, upholding deficiency determinations totaling more than $ 3.3 million assessed against Hachette’s two predecessor corporations for the 1987 and 1988 tax years. Hachette contends that the regulation upon which the deficiency determination was based is invalid because it denies an exclusion from gross income that Hachette claims is required by statute.

The statute at issue, 26 U.S.C. § 458 (1994), allows magazine distributors to exclude from gross income the income attributable to the sales of extra copies of magazines provided to retailers for display purposes that are never expected to be sold and are returned within the first two and a half months of the following tax year. The statute refers only to gross receipts in defining the “amount excluded.” The regulation, Treas. Reg. § 1.458-1 (1995), following the standard method of determining gross income in a merchandising business, requires distributors to match costs with gross receipts and disallows deductions taken in the first tax year for costs of returned magazines that were not reflected in income.

In a comprehensive and thorough opinion, Judge Laro ruled that the regulation is valid. We agree and affirm on the opinion of the Tax Court.

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PER CURIAM:

Hachette USA, Inc. and its subsidiary, Curtis Circulation Co. (collectively “Hachette”), appeal from the decision of the Tax Court (David Laro, Judge) entered October 30, 1995, upholding deficiency determinations totaling more than $ 3.3 million assessed against Hachette’s two predecessor corporations for the 1987 and 1988 tax years. Hachette contends that the regulation upon which the deficiency determination was based is invalid because it denies an exclusion from gross income that Hachette claims is required by statute.

The statute at issue, 26 U.S.C. § 458 (1994), allows magazine distributors to exclude from gross income the income attributable to the sales of extra copies of magazines provided to retailers for display purposes that are never expected to be sold and are returned within the first two and a half months of the following tax year. The statute refers only to gross receipts in defining the “amount excluded.” The regulation, Treas. Reg. § 1.458-1 (1995), following the standard method of determining gross income in a merchandising business, requires distributors to match costs with gross receipts and disallows deductions taken in the first tax year for costs of returned magazines that were not reflected in income.

In a comprehensive and thorough opinion, Judge Laro ruled that the regulation is valid. We agree and affirm on the opinion of the Tax Court.

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87 F.3d 43, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hachette-usa-inc-as-successor-to-hachette-publications-inc-and-curtis-ca2-1996.

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