Rooney, Plotkin, and Willey (collectively, the partners) (plaintiffs) were partners in an accounting partnership. Occasionally, the partners would obtain goods or services from a client business and reduce the client’s accounting bill by the price of those goods or services. Four of the partnership’s clients—a pharmacy, a restaurant, a gas station, and a plumber—were struggling and did not pay the partners for their accounting services. The partners began patronizing the delinquent businesses, receiving goods and services from the clients and reducing the clients’ bills based on the market value of those goods and services. The partners decided that the goods and services they were getting from their clients were not worth their market values and began subjectively determining their values. The partners then adjusted their clients’ accounting bills to factor in the subjective determinations, meaning that the clients owed more than they would have if their goods and services were calculated at their retail prices. When filing their taxes, the partners calculated their gross incomes based on their subjective valuations of the clients’ goods and services. The partners argued that they would not patronize their clients’ businesses if the clients were not in financial distress, and therefore the retail prices were above the fair market values that the partners would agree to pay otherwise. The Commissioner of Internal Revenue (the Commissioner) (defendant) held that, for the purposes of calculating gross income, the fair market values of the goods and services were the prices that the businesses charged their customers. The partners petitioned the United States Tax Court for a redetermination.