Before JAMES, STERNHAGEN, TRAMMELL, and TRUSSELL.
This appeal involves a deficiency in income and profits taxes for the fiscal year ended August 31, 1919.
FINDINGS OF FACT.
The Commissioner, as a result of an audit and redetermination of the income-tax liability of the taxpayer for the fiscal year ended August 31, 1919, increased its income by the amount of $2,106.04, upon the theory that it had taken as a deduction in determining its taxable income for that taxable year that amount paid during that year as income and profits taxes for the fiscal year 1918. The entire income and profits taxes for the fiscal year ended August 31, 1918, were $2,106.04. Of this amount, $1,053.02 was paid during September and December, 1919, after the close of the fiscal year 1919. The taxpayer was on the accrual basis.
DECISION.
The determination of the Commissioner is approved.
OPINION.
TRAMMELL: From the foregoing facts we are asked to find that the action of the Commissioner in restoring to income for the fiscal year 1919 the amount of the tax for the fiscal*2780 year 1918, which he concluded from an audit of the taxpayer's return had been deducted in determining net income, was incorrect. The taxpayer introduced the canceled checks showing that $478 was paid to the collector on September 13, 1919, and that $575 was paid on December 13, 1919. It introduced no other evidence. The taxpayer's counsel argued from the evidence that since these amounts were paid after the close of the fiscal year ended August 31, 1919, they were not deducted during that fiscal year. No witness testified that the entire amount of the tax for the fiscal year 1918 was not in fact deducted, while an analysis of surplus indicates that it was. The fact that a portion of the tax was not actually paid is not of great weight, since the taxpayer was on the accrual basis and there is no evidence that the unpaid portion of the tax was not accrued and deducted.
On account of the lack of evidence to support the appeal, the action of the Commissioner is approved.