Portland Copper & Tank Works, Inc. v. Commissioner of Internal Revenue

First Circuit

Portland Copper & Tank Works, Inc. v. Commissioner of Internal Revenue

351 F.2d 460, 16 A.F.T.R.2d (RIA) 5742, 1965 U.S. App. LEXIS 4291

CourtCourt of Appeals for the First Circuit

DecidedOctober 14, 1965

Docket6510

StatusPublished

Cited by4 cases

This text of 351 F.2d 460 (Portland Copper & Tank Works, Inc. v. Commissioner of Internal Revenue) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Portland Copper & Tank Works, Inc. v. Commissioner of Internal Revenue, 351 F.2d 460, 16 A.F.T.R.2d (RIA) 5742, 1965 U.S. App. LEXIS 4291 (1st Cir. 1965).

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Opinion

PER CURIAM.

Essentially this case involves the single question whether an accrual taxpayer which has received payments under subcontracts subject to renegotiation under goverment procurement statutes may set up as a reserve, and accordingly deduct from gross income, amounts which by as-sertedly and, we will assume, concededly, proper accounting methods it appeared during the taxable year would later have to be repaid. The Tax Court rejected taxpayer’s contention. 43 T.C. 182. We have little to add to its opinion. It does not help taxpayer for the court to find that these reserves were minimum amounts. It is the existence of any reserve, not the amount, which is in controversy. Taxpayer’s contracts with the prime contractor gave it a right to receive full payment, and no negotiations resulting in a readjustment of the contracts in question took place during the taxable year. The- fact that as to some of the contracts taxpayer made a specific offer in settlement of its obligation to renegotiate established nothing. Since the offers had not been accepted, they could be withdrawn. We agree with the Tax Court that there was nothing inherently improper in requiring taxpayer to wait and proceed under 26 U.S.C. §§ 1341 and 1482.

Affirmed.

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PER CURIAM.

Essentially this case involves the single question whether an accrual taxpayer which has received payments under subcontracts subject to renegotiation under goverment procurement statutes may set up as a reserve, and accordingly deduct from gross income, amounts which by as-sertedly and, we will assume, concededly, proper accounting methods it appeared during the taxable year would later have to be repaid. The Tax Court rejected taxpayer’s contention. 43 T.C. 182. We have little to add to its opinion. It does not help taxpayer for the court to find that these reserves were minimum amounts. It is the existence of any reserve, not the amount, which is in controversy. Taxpayer’s contracts with the prime contractor gave it a right to receive full payment, and no negotiations resulting in a readjustment of the contracts in question took place during the taxable year. The- fact that as to some of the contracts taxpayer made a specific offer in settlement of its obligation to renegotiate established nothing. Since the offers had not been accepted, they could be withdrawn. We agree with the Tax Court that there was nothing inherently improper in requiring taxpayer to wait and proceed under 26 U.S.C. §§ 1341 and 1482.

Affirmed.

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Bluebook (online)

351 F.2d 460, 16 A.F.T.R.2d (RIA) 5742, 1965 U.S. App. LEXIS 4291, Counsel Stack Legal Research, https://law.counselstack.com/opinion/portland-copper-tank-works-inc-v-commissioner-of-internal-revenue-ca1-1965.

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