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Wilkinson-Beane, Inc. v. Commissioner, 420 F.2d 352 (1st Cir.
1970), affg. T.C. Memo. 1969-79. There, the taxpayer was an
undertaker that sold caskets as part of its funeral service. In
finding that the caskets were merchandise for purposes of section
471, the Court of Appeals for the First Circuit noted that the
taxpayer normally kept an inventory of some 35 caskets, that the
caskets were not necessarily used during the year but were
purchased and occasionally carried for long periods of time, that
the caskets were on display and played a central role in the
"sale" of the taxpayer's service, and that there was a direct
relationship between the magnificence of the caskets and the cost
of the service. See id.
Those factors are not present here. Petitioner kept no more
than a 2-week supply of chemotherapy drugs on hand and used
virtually all the drugs during the taxable year. The drugs also
were not displayed to patients for selection, and patients played
no role in determining the type or amount of drugs used on them.
Furthermore, unlike the taxpayer’s business in Wilkinson-Beane,
Inc., the type of chemotherapy drugs or the "magnificence"
thereof played no role in whether patients chose to purchase
petitioner's services. The variable factor in the cost of a
patient's treatment is a factor out of the patient's control;
i.e., the type and severity of the patient's condition. We also
find it critical that a person is unable to obtain the
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