Commissioner v. Indianapolis Power and Light Company

Indianapolis Power and Light (plaintiff) collected refundable deposits from credit-risk customers, holding the funds in its general accounts, paying interest on them, and returning them (as cash, check, or bill credit) once a customer either demonstrated good credit, terminated service, or applied the deposit against a missed payment; IPL treated the deposits as liabilities rather than income. The Commissioner (defendant) audited and determined the deposits were taxable advance payments for future electricity service, but the Tax Court and Seventh Circuit both ruled for IPL, and the Supreme Court granted certiorari.