United States v. American Can Co., 280 U.S. 412 (1930)

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United States v. American Can Company

Nos. 128

, 129

, 130

Argued January 21, 1930
Decided February 24, 1930
280 U.S. 412

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE THIRD CIRCUIT

Syllabus

1. The Act of September 8, 1916, § 13, par. (d), in providing that a corporation which keeps its accounts upon any basis other than that of actual receipts and disbursements may, subject to regulations, make its income return upon the basis of its accounts unless that basis does not clearly reflect the income, refers to the general bookkeeping system followed by the taxpayer, and not to the accuracy or propriety of mere individual items or entries upon the books. P. 419.

2. Therefore, where the books of corporations, kept upon the accrual basis, and returns upon that basis, contained excessive inventory valuations, and thereby indicated net incomes much too small, the Commissioner of Internal Revenue properly corrected the erroneous valuations and made reassessments upon the returns as so modified. His rejection of the errors was not a rejection of the basis upon which the returns were made, and did not make it necessary that the reassessment be based on actual receipts and disbursements. Id., 31 F.2d 730 reversed.

Certiorari, post, p. 538, to review judgments of the circuit court of appeals which affirmed recoveries in the district court, 20 F.2d 970, in actions against the United States for moneys collected as income and excess profits taxes. See also Aluminum Castings Co. v. Routzahn, 31 F.2d 669.