The relevant stipulated facts are as follows:
In its 1958 tax return, taxpayer claimed depreciation on 'delivery trucks' computed pursuant to the 'straight line' method. There was included in the total amount, however, two months' straight line depreciation on a passenger automobile purchased in November, 1958, for use in the business, and twenty percent of the cost of the automobile. This computation, for present purposes,
was in accordance with section 179. The statement required by the Regulation was not attached to the return.
Treasury Regulations are to be sustained unless 'unreasonable and plainly inconsistent' with the authorizing statutory provision. Commissioner of Internal Revenue v. South Texas Lumber Co., 333 U.S. 496, 501, 68 S. Ct. 695, 92 L. Ed. 831 (1948), rehearing denied, 334 U.S. 813, 68 S. Ct. 1014, 92 L. Ed. 1744 (1948); Senft v. United States, 319 F.2d 642, 646 (3rd Cir. 1963). This is particularly true when, as here, the Regulation is promulgated pursuant to statutory directive. See Archbold v. United States, 201 F.Supp. 329 (D.N.J.1962), affirmed per curiam, 311 F.2d 228 (3rd Cir. 1963); New Creek Co. v. Lederer, 295 F. 433 (3rd Cir. 1924), cert. denied, 265 U.S. 581, 44 S. Ct. 456, 68 L. Ed. 1190 (1924).
The Regulation herein involved is eminently reasonable. Its apparent aim is to put the tax collector on notice that a taxpayer is claiming the benefit of the statutory provision granting an additional depreciation allowance (sometimes referred to as 'bonus' depreciation) resulting in the reduction of tax liability for that year (see Mother Lode Coalition Mines Co. v. Comm'r, 317 U.S. 222, 227, 63 S. Ct. 179, 87 L. Ed. 227 (1942), rehearing denied, 317 U.S. 706, 63 S. Ct. 70, 87 L. Ed. 563 (1924); Estate of Mary Z. Bryan, 22 CCH TC Memo.Dec. 1963-182 (T.C. 1963)) and to furnish the tax collector information with which to determine whether or not section 179 was properly applied.
The taxpayer's statement of the issue implying that all that it neglected to do was file certain auxiliary information
is inaccurate and misleading. Taxpayer did nothing to put the tax collector on notice that it had elected the additional benefit conferred under section 179. The return which taxpayer filed contained a section requiring it to list the depreciation taken pursuant to each of five enumerated methods of computation, including 'additional first year (Section 179).' Taxpayer did not complete that section; nor did it identify the property as to which the additional depreciation was being claimed; nor did it identify the amount of the additional depreciation so claimed; nor did it furnish any of the information concerning the property called for by the Regulation. Indeed nowhere was there a clue that the election had been made except in the total amount claimed as a deduction for depreciation.
Taxpayer has suggested that since its returns were audited virtually every year and since its books clearly revealed the information sought by the Regulation, the Regulation serves no purpose and is, therefore, unreasonable. This position is untenable. The tax collector should not be required to audit taxpayer's books to ferret out the method by which taxpayer computed its depreciation deduction. See Commissioner of Internal Revenue v. South Texas Lumber Co., supra; New Creek Co. v. Lederer, supra.
The notice requirement of the Regulation is reasonable and will be enforced against taxpayer. Whether it would be unreasonable to deprive the taxpayer of the benefit of the 'bonus' depreciation for failure to comply with all requirements of the Regulation is an issue not raised by the facts of this case. Judgment will be entered in favor of the United States.