Burnet v. Sanford & Brooks Co.

Burnet v. Sanford & Brooks Co.
Burnet v. Sanford & Brooks Co.
	Supreme Court of the United States
Argued December 5, 8, 1930; Decided January 5, 1931
Full case name	Burnet, Commissioner of Internal Revenue, v. Sanford & Brooks Co.
Citations	282 U.S. 359 (more) 51 S. Ct. 150; 75 L. Ed. 383; 1931 U.S. LEXIS 7; 2 U.S. Tax Cas. (CCH) ¶ 636; 9 A.F.T.R. (P-H) 603; 1931-1 C.B. 363; 1931 P.H. P389
Case history
Prior	Sanford & Brooks Co. v. Commissioner, 11 B.T.A. 452 (1928); reversed, 35 F.2d 312 (4th Cir. 1929); cert. granted, 281 U.S. 707 (1930).
Holding
	An annual accounting system is a practical necessity if the federal income tax is to produce revenue ascertainable and payable at regular intervals.
Court membership
	Chief Justice Charles E. Hughes Associate Justices Oliver W. Holmes Jr. · Willis Van Devanter; James C. McReynolds · Louis Brandeis; George Sutherland · Pierce Butler; Harlan F. Stone · Owen Roberts
Case opinion
Majority	Stone, joined by unanimous
Laws applied
	Sixteenth Amendment; Internal Revenue Code;

Burnet v. Sanford & Brooks Co., 282 U.S. 359 (1931), was a case heard before the United States Supreme Court dealing with accounting for purposes of federal income tax and the Sixteenth Amendment to the United States Constitution. The case held that an annual accounting system is a practical necessity if the federal income tax is to produce revenue ascertainable and payable at regular intervals.^[1]

The case was decided at a time when losses could not be carried forward to future years. Since 2018, Section 172 of the Internal Revenue Code now generally allows a taxpayer to use net operating losses from previous years to deduct up to 80% of income for a given year.^[2]