Clifton Mfg. Co. v. Commissioner

MuRdock, /.,

concurring: This petitioner in 1934 took advantage of the rule that a creditor-taxpayer upon an accrual basis may omit reporting income accruing in that year from a debtor where, at the close of the taxable year, there was grave doubt as to ultimate payment. That rule was adopted to relieve taxpayers of a hardship. The effect of the rule is to put the taxpayer upon a cash basis as to the questionable item, so that it is not to be reported until actually paid. Any other application would make administration of the rule by the Commissioner too difficult.

Van Fossan, agrees with the above.