Jack Showell and Dorothy Showell v. Commissioner of Internal Revenue

254 F.2d 461, 1 A.F.T.R.2d (RIA) 1469, 1958 U.S. App. LEXIS 5787

• Court: Court of Appeals for the Ninth Circuit
• Decided: April 14, 1958
• Docket: 15710
• Status: Published

Opinions

CHAMBERS, Circuit Judge.

This court appreciates that it is not a trial court. But it is sorely troubled with Showell’s Exhibit 3, the only bookkeeping record¹ ever produced by him for the agents of the Commissioner or before the Tax Court as representing his income for the year 1949.

The exhibit is an accountant’s sheet of yellow work paper. In the first column are dates. The second column is entitled “gain” and the third column “loss.” The entries for 22 days indicate gain. The entries for 15 days indicate loss.

The document, per se, has not been directly attacked at any stage. In our former opinion we questioned it slantwise, particularly in a footnote and again in our memorandum on the petition for rehearing.²

To us, untrained but with fair eyesight, the sheet looks like a recapitulation prepared in about three installments. The entries from January 1 to December .7 at least, on the best inspection we can give the document, appear to have been written successively at one sitting with the same sharp but fairly soft pencil. Then, beginning with December 17 and running through December 23, the gains seems to have been written with a sharp, hard pencil, again with the same arresting uniformity of pencil. For December 10, 11 and 12 and December 31, the entries are in ink, apparently the same ink and the same pen.

What strains our credulity to the breaking point is that if this exhibit is accepted as containing contemporaneous entries, we must conclude that Bookie Showell picked up the single yellow loose sheet on January 1 or January 2 and wrote on that day, “Jan 1 — 3950.00” (a gain); that he then filed the sheet or let it lay around until September 17 or 18, eight and a half months later, and he then picked it up and wrote “Sept 17 — 882.50” (a loss); and perhaps wrote with the same pencil in the same state of sharpness.

In our prior opinion, we acknowledged it possible that the taxpayer could explain the strange appearance of the document.

This is not the ordinary case of a witness relating an event where his story in its nature is not subject to exact checking. In our judgment the “contempo-raneousness” of the entries ought to be capable of proof or disproof. And, if not, that too ought to be susceptible of proof.

We hope that this is not a situation where the Commissioner and about four other agencies have taken the view that looking into the document is all someone else’s business.

We remand the case to be reopened by the Tax Court to receive further evidence. Particularly the authenticity of Exhibit 3 should be a subject of inquiry. It should set aside its findings and decision.

Remanded.

1 . Showell did produce cancelled checks for three items of overhead expense and two “bad checks” given him by a customer.

2 . Showell v. Commissioner, 238 F.2d 148.