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American Automobile Ass’n v. United States, 367 U.S. 687 (1961)
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General SummaryThis case is from a collection containing the full text of over 16,000 Supreme Court cases from 1793 to the present. The body of Supreme Court decisions are, effectively, the final interpretation of the Constitution. Only an amendment to the Constitution can permanently overturn an interpretation and this has happened only four times in American history.
American Automobile Ass’n v. United States, 367 U.S. 687 (1961)
American Automobile Association v. United States No. 288 Argued April 17, 1961 Decided June 19, 1961 367 U.S. 687
CERTIORARI TO THE COURT OF CLAIMS
Syllabus
Petitioner keeps its books and makes its income tax returns on a calendar year accrual basis. For the years 1952 and 1953, it reported as gross income only that portion of the total prepaid annual membership dues actually received or collected in the calendar year which ratably corresponded with the number of membership months covered by those dues occurring during the same taxable year. The balance was reserved for ratable monthly accrual over the remaining membership periods in the following calendar year, as deferred or unearned income reflecting the estimated expense of service to its members. In the exercise of his discretion under § 41 of the Internal Revenue Code of 1939, the Commissioner determined not to accept petitioner’s accounting system, and assessed deficiencies resulting mainly from petitioner’s failure to include in its gross income for each year the total amount of dues received during that year.
Held: the Commissioner’s action is sustained. Pp. 688-698.
(a) The accounting method used by petitioner may present an accurate image of the total financial structure, but it fails to respect the criteria of annual tax accounting, and it may be rejected by the Commissioner. Pp. 690-692.
(b) A different conclusion is not required by the finding of the Court of Claims that petitioner’s method of accounting had been used regularly by it since 1931, and was in accord with generally accepted commercial accounting principles and practices. Pp. 692-694.
(c) The conclusion here reached is confirmed by the facts that Congress introduced into the Internal Revenue Code of 1954 provisions which specifically permitted essentially the same practice as that employed by petitioner; it repealed those provisions retroactively one year later; and, in 1958, it rejected a proposed amendment which would have specifically permitted this practice with respect to prepaid automobile association membership dues. Pp. 694-698.
___ Ct. Cl. ___, 181 F. Supp. 255, affirmed.
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Chicago: U.S. Supreme Court, "Syllabus," American Automobile Ass’n v. United States, 367 U.S. 687 (1961) in 367 U.S. 687 367 U.S. 688. Original Sources, accessed November 24, 2024, http://originalsources.com/Document.aspx?DocID=USJIKS722FG9AH3.
MLA: U.S. Supreme Court. "Syllabus." American Automobile Ass’n v. United States, 367 U.S. 687 (1961), in 367 U.S. 687, page 367 U.S. 688. Original Sources. 24 Nov. 2024. http://originalsources.com/Document.aspx?DocID=USJIKS722FG9AH3.
Harvard: U.S. Supreme Court, 'Syllabus' in American Automobile Ass’n v. United States, 367 U.S. 687 (1961). cited in 1961, 367 U.S. 687, pp.367 U.S. 688. Original Sources, retrieved 24 November 2024, from http://originalsources.com/Document.aspx?DocID=USJIKS722FG9AH3.
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