Tokyo office expands;

              In early 1967, a case was reported in which the tax­payer's
use of the direct cost method was upheld. In
McNeil Machine & Engineering Co. vs. U.S. (U.S. Court
of Claims No. 66-63, March 29, 1967), a Court of Claims
Trial Commissioner determined that the direct cost
method "clearly reflected income" because it was:
1. Consistently used in this case;
2. Within the scope of generally accepted accounting
principles; and
3. In conformity with the income tax regulations.
Although this case has not as yet (November, 1967)
Our Tokyo office has undergone several changes since its
move to a new building in October. Thomas J. Ennis has
moved to Tokyo to become partner in charge of the
Tokyo office and coordinator in the Asian-Pacific area,
and Dave Nagao has been promoted to manager.
Mr. Ennis, who recently completed some work in Turkey
for the U.S. State Department, brings to his new post
almost a decade of experience as partner in charge of the
San Francisco office. He made his first exploratory trip to
this region some years ago, and it is his feeling that trade
and investment will continue to expand. He expects the
Tokyo office to participate in this growth.
Dave Nagao worked in the San Francsico and Honolulu
offices before moving to Tokyo in 1964, and is one of
20
been reviewed by the full Court of Claims, its conclu­sions
are nonetheless significant.
CONCLUSION:
The IRS is becoming increasingly interested in the
inventory techniques being used for tax purposes. The
ability to test these techniques and to challenge their
use will increase as the computer begins to play a
larger part in tax examinations. Now is the time for
taxpayers to examine their inventory methods and
techniques to determine if they will be acceptable to
the IRS.
the few people who have met certification requirements in
both Japan and the U.S.A.. Mr. Nagao, who has an M.B.A.
degree from U.C.L.A., refuses to commit himself on which
examination is tougher. His only comment is, "I wouldn't
like taking either of them again."
The other key men in the office are Japanese CPAs,
Mr. Takayama and Mr. Kobayashi, who developed an
interest in international work as college classmates. (Mr.
Kobyashi is active in the international committee of
the Japanese Institute of CPAs.) With the aid of these
associates, the Touche, Ross office in Tokyo offers
clients an attractive combination of talents; professional
services of CPAs with both a rich background of United
States experience and an intimate knowledge of Japanese
business customs and practices.
THE QUARTERLY
Dave Nageo and Thomas ("Jeff") Ennis are shown meeting with client G. Barry Seyman. Mr. Seyman is important in the
applied hydraulic power field, and is general manager for far eastern operations of Applied Power International, vice
president of TOKYO YUATSU KOGYO and president of Applied Power Far East Ltd.
Tokyo Of Gee Expands