concurring: I agree that this case does not warrant modification of or deviation from the long-established rule that prepaid income is taxable in the year received provided such income is subject to unrestricted use by the taxpayer. For that reason, I do not think the discretionary action of the Commissioner in determining under section 41 of the 1939 Code that this taxpayer’s method of accounting did not clearly reflect its income “exceeded permissible limits,” as said by the Supreme Court in Automobile Club of Michigan v. Commissioner, 353 U.S. 180. However, I do not agree that the general rule can be applied by the Commissioner in all cases and under all circumstances, absent only some “special regulation or exceptional statutory provisions.” I think there might be situations where a taxpayer’s method of accounting for income received, which does not conform to the general rule, would correctly reflect his income and that it would be exceeding the limits of discretion accorded the Commissioner in section 41 to either correct items within petitioner’s system of accounting or require a different system of accounting. I agree with Judge Pierce that the rule is not inflexible, but I believe the circumstances in which it would not be applicable would have to be quite unusual.
We found in Automobile Club of Michigan, 20 T.C. 1033, that the taxpayer’s method of accounting did not clearly reflect its income and accordingly that the Commissioner did not err in so determining. I see nothing in the facts in this case to justify reaching a different conclusion here. The pro rata allocation of membership dues in monthly amounts is as artificial and unrelated to the services petitioner may be called upon to render in this case at it was in that case, and I think this finding is implicit in the conclusion of the Court here.
I do not think this conclusion is contrary to the settled views of the Court of Appeals for the Second Circuit as expressed in Bressner Radio, Inc. v. Commissioner, 267 F. 2d 520, reversing 28 T.C. 378, as Judge Pierce seems to think. The Court of Appeals in that case expressly distinguished the Automobile Chib of Michigan case, but I do not think the case before us can be so distinguished.
Withet, J., agrees with this concurring opinion.