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Gross Receipts
a. August 1990 Bank Deposits of $88,181
This issue was not raised in the assignment of errors in the
petition nor in petitioner's trial memorandum or supplemental
trial memorandum, and the issue probably should be treated as
conceded by petitioner. Rule 34(b)(4). However, without
objection from respondent, it was raised in petitioner's opening
statement at the beginning of the trial and will be treated as
tried by consent of the parties. Petitioner requests the Court
to make an ultimate finding of fact that respondent erroneously
increased its income for its taxable year ended July 31, 1990, by
this $88,181 amount.
The parties agree that $88,181 in checks were deposited in
petitioner's bank account in August of 1990, were reported as
part of gross receipts for its taxable year ended July 31, 1991,
and on audit by respondent were removed from that year and
included as gross receipts for the taxable year ended July 31,
1990. There agreement ends.
The parties disagree as to whether petitioner is a cash
basis or an accrual basis taxpayer. At trial, in response to the
Court's direct question, respondent's counsel advised the Court
that petitioner was a cash basis taxpayer. The Court was not
advised otherwise thereafter during the trial. In its post-trial
brief, petitioner argues that as a C corporation it necessarily
had to be on the accrual method of accounting, citing section
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