Jim Turin and Sons Inc., Petitioner-Appellee, Vs. Commissioner of Internal Revenue, Respondent-Appellant (Research Paper Sample)

Student’s Name:
Tutor’s Name:
Course:
Date:
Jim Turin and Sons Inc., Petitioner-Appellee, Vs. Commissioner of Internal Revenue, Respondent-Appellant
Summary of the case;
To understand the basis of this case and how it ended up in court, we need to understand all the stakeholders and the roles they played. Jim Turin and Sons Inc., who is the taxpayer, in this case, was a corporation that offered paving services. This corporation, however, does not manufacture the asphalt that it uses in making concrete and constructing the roads. Instead, the firm usually buys asphalt from another organization. Whenever the taxpayer was taking in a new contract, it always factors in the cost of the asphalt that it will use if it wins the bid. Due to the ability to harden quickly, emulsified asphalt is supposed to be put to use within a few hours; failure to this, it becomes useless. As a result, the manufacturer of asphalt is always required to ship the product just a few hours before it is used. Once the paving is done, the taxpayer could be paid within 30 days of billing. However, this is not the case when it comes to paying taxes. ("Findlaw's United States Ninth Circuit Case And Opinions.")
For federal tax payment, Jim Turin and Sons Inc. employed the cash method. Under this method, any income sources are outlined as gross income, and any expenses are subtracted as soon as they occur. This means that the company often subtracted the total cost of asphalt used in the construction as soon as it paid the manufacturer. Jim Turin and Sons Inc., or rather the taxpayer being a paving corporation as I already mentioned, the Commissioner looked at the asphalt that is used for paving as a "merchandise" as stipulated by Treas. Reg. S 1.471-1. Assuming that Jim Turin and Sons Inc. possessed the inventories – stored asphalt, he stipulated for the use of the accrual method of accounting.