Hugo Black

“ A taxpayer, having chosen to report his taxable income from installment sales on the installment cash receipts plan, thereby spreading its gross earnings and profits from such sales over a number of years and avoiding high tax rates, was not permitted to obtain a further reduction by shifting to an accrual plan and treating uncollected balances on these installment sales as though they had actually been received in the year of the sale. ”

“ Finally respondent contends that § 44 merely conferred upon it a privilege to defer payment of income tax on its tax-'recognized' profits realized from installment sales until the unpaid installment obligations were collected.
The congressional reports on § 115 (l) do not provide support for the idea that gains not included in taxable income under the taxpayer's method of accounting may nevertheless be considered 'realized' and 'recognized' for computing tax adjustments or deductions so long as they might have entered into such computations under a different method of accounting. ”

“ For instance, a corporation keeping its books and filing its income tax return under sections 41, 42, and 43 on the cash receipts and disbursements basis may not use the accrual basis in determining earnings and profits; a corporation computing income on the installment basis as provided in section 44 shall, with respect to the installment transactions, compute earnings and profits on such basis ”

“ This Court has many times declared that Treasury regulations must be sustained unless unreasonable and plainly inconsistent with the revenue statutes and that they constitute contemporaneous constructions by those charged with administration of these statutes which should not be overruled except for weighty reasons. ”

“ That the Commissioner was particularly intended by Congress to have broad rule-making power under the regulation was manifested by the first words in the new installment basis section which only permitted taxpayers to take advantage of it 'Under regulations prescribed by the Commissioner with the approval of the Secretary * * *.' The clause is still contained in § 44 of the code. ”