“To every thing there is a season, and a time to every purpose under the heaven: A time to be born, and a time to die; a time to plant, and a time to pluck up that which is planted;”1 a time to purchase fertilizer, and a time to take a deduction for that which is purchased. In this appeal from a Tax Court decision, we are asked to determine when the time for taking a fertilizer deduction should be.
I. FACTS
Taxpayer-appellant LaVerne Schenk2 is a Texas farmer who raises wheat and milo and “runs a few cattle.” For several years, Mr. Schenk has been an officer 3 and member of the Dawn Agricultural Cooperative, an organization which sells farm supplies4 and personal consumption items5 to its members.
Each year, Mr. Schenk buys substantial amounts of fertilizer, farm supplies, and groceries from the Cooperative. Throughout the early 1970’s, it was his practice to “prepay” for many of these purchases. Each December, Mr. Schenk would deliver a check to the Cooperative to cover the cost of fertilizer and supplies delivered and consumed during the following year.
In accord with his standard practice, Mr. Schenk delivered a $25,000 check to the Cooperative on December 30, 1975. This check bore a notation indicating that $20,-000 was to be used for the purchase of approximately 100 tons of fertilizer and $5,000 would be for “general supplies.” Upon receipt of Schenk’s check, the Cooperative credited these “payments” to separate “fertilizer” and “general supply” accounts that it maintained for each of its members.
During the following year, Schenk actually took delivery of $20,000 worth of fertilizer which was charged against his “fertilizer” account. He also purchased farm supplies and personal consumption items which were charged against his “general supply” account.
Once Schenk had made the $25,000 expenditure, he could not receive a cash refund. However, in making his “prepayment” Schenk was not irrevocably committing himself to the purchase of specific goods within a limited span of time. If a Cooperative member ordered supplies or groceries and his general supply account balance could not cover the cost of the purchase, funds would be transferred from the member’s fertilizer account into his general supply account.6 Similarly, if a member ordered fertilizer and his fertilizer account balance would not cover the purchase, the fertilizer shipment would be charged against his general supply account.7 Moreover, if annual purchases of fertilizer, supplies, or groceries did not exhaust the amounts prepaid, any outstanding balances could be carried forward to cover the cost of purchases made in future years. Thus, while Schenk characterized his December *3171975 expenditure as a “fertilizer prepayment,” he had not irrevocably committed himself to the purchase of fertilizer in the following calendar year. If he chose not to take delivery of fertilizer during 1976, he could have purchased other farm supplies or personal consumption items and charged the cost of these goods against his “fertilizer account” balance. If he chose not to make any purchases in the following year, his outstanding balances could have been carried forward and used to fund purchases of goods delivered far in the future.
Although the Schenks chose to pay for their annual purchases in advance, their decision to prepay did not secure any special business advantage. The Cooperative did not require prepayment as a condition of membership and prepayment did not provide the Schenks with a guaranteed price.8 While Schenk claims to have believed that prepayment might guarantee a supply of fertilizer in the event of a shortage, the Tax Court found that prepayment afforded no such benefit.9
II. PROCEDURAL HISTORY
In preparing his 1975 federal income tax return, Mr. Schenk claimed the entire December 30, 1975 expenditure as a deduction from his 1975 taxable income. Although very little of that $25,000 expenditure had actually been used to pay for fertilizer or supplies delivered in 1975,10 Schenk maintained that he could take the deduction in 1975 because he was a cash basis taxpayer and payment had been made in 1975.
As luck would have it, the Schenks’ 1975 federal income tax return was selected for examination. The Internal Revenue Service took the position that the $25,000 year-end expenditure could not be deducted from the Schenks’ 1975 income because the outlay was a mere “deposit” and not a bona fide “prepayment.” Accordingly, the Service issued a Notice of Deficiency. In response, the Schenks elected to institute proceedings in the U. S. Tax Court.
Following a brief trial, the Tax Court made factual findings which the parties concede to be fair and accurate.11 The Tax Court found, inter alia, that Mr. Schenk’s 1975 year-end expenditures were nonrefundable and that during the following year he did in fact take delivery of the fertilizer and supplies he had purportedly paid for. Nevertheless, the Tax Court held that Schenk’s year-end expenditure was not a deductible prepayment because at the time he made the outlay, he was not irrevocably bound to the purchase of fertilizer in the following year. Relying upon this Court’s decision in Stiee v. United States, 540 F.2d 1077 (5th Cir. 1976), the Tax Court held that because the taxpayers retained the right to purchase a wide variety of goods with the funds ostensibly earmarked for the purchase of fertilizer, the expenditure could not be characterized as a bona fide fertilizer prepayment.12 Accordingly, the Tax Court upheld the Commissioner’s determination of a deficiency.13 The Schenks then brought this appeal.14
*318III. IT’S ALL IN THE TIMING: WHEN CAN THE FERTILIZER PAYMENT BE DEDUCTED?
There is no question but that a farmer’s purchase of fertilizer is a deductible ordinary and necessary business expense.15 The problem here is determining when the deduction should be taken. Fortunately, this is not a question of first impression. In Stice v. United States, 540 F.2d 1077 (5th Cir. 1976), this Court confronted another instance of a cash-basis Texas farmer who sought to deduct end-of-the-year expenditures as fertilizer prepayments. We find that Stice controls in the matter sub judice.
In Stice, a wily farmer claimed a $70,000 deduction for fertilizer and supplies supposedly purchased in December of 1969. Only about $7,000 of these supplies were actually delivered in the year of payment, while $54,162 worth of supplies were delivered during the following year, 1970. Moreover, most of the goods delivered in 1970 turned out to be different than items purportedly purchased in December of 1969. We held that the taxpayer’s end-of-the-year fertilizer “purchases” were in fact “nondeductible deposits, rather than ordinary and necessary business expenses deductible in the taxable year.” 540 F.2d at 1079.16
In reaching our decision in Stice, we found the standards set forth in Revenue Ruling 75-15217 to be quite persuasive on the question of the deductibility of prepaid agricultural expenses. In that ruling, the Commissioner stated that:
Whether a particular expenditure is a deposit or a payment depends on the facts and circumstances of each case. Where it can be shown that the expenditure is made pursuant to a binding commitment to accept delivery of a specific quantity at a fixed price, and the buyer is not entitled, under contract provision or business custom, to a refund or repurchase, the expenditure will not be considered a deposit. The following factors, although not all inclusive, are indicative of a deposit, rather than a payment: the absence of specific quantity terms; the right to refund of any unapplied credit at the termination of the contract . . .; and the right to substitute other goods or products for the [goods] specified in the contract.
Rev. Rule 75-152.18
Applying the standard set forth by the Commissioner in his Revenue Ruling, this Court found that Mr. Stice had retained “the right to substitute other goods or products” for the fertilizer he had purportedly purchased. We therefore held that his *319year-end fertilizer expenditures were mere deposits and not deductible prepayments. 540 F.2d at 1080-81.
In the case now before us, the Tax Court held that our opinion in Stice controlled its decision. We agree. Taxpayer-farmer Schenk, like taxpayer-farmer Stice, made large lump-sum prepayments nominally earmarked for fertilizer to be delivered in the year following payment. However, Schenk, like Stice, was never obligated to take delivery of fertilizer. Schenk, like Stice, retained the option to have his fertilizer prepayment applied to the purchase of entirely different products, even groceries or pet food. See supra note 6. Moreover, if his annual purchases of fertilizer, supplies, or groceries failed to exhaust the amounts prepaid, any outstanding balances could be carried forward to cover the cost of purchases made in future years. Thus, although Schenk’s December 30, 1975 payment was ostensibly for the purchase of fertilizer to be delivered in 1976, he actually retained the right to use these funds for the purchase of many other products far into the future. Conceivably, Schenk could even have used the December 30, 1975 expenditure to cover the cost of soft drinks delivered in 2001.19
We recognize that Schenk did indeed take delivery of the fertilizer he had purportedly purchased during the final hours of 1975. Viewed with the benefit of hindsight, his 1975 expenditures might appear to have been prepayment for fertilizer and farm supplies actually delivered during the following year. However, we cannot have a rule of tax accounting in which the deductibility of important expense items turns upon events or contingencies occurring long after the close of the tax year.20 “[S]uch retrospective adjustments based on events transpiring in subsequent years . . . [would] threaten the integrity of the annual accounting period.” Ward, Tax Postponement, 53 Tex.L.Rev. 1119, 1143 (1975). In determining whether Mr. Schenk’s year-end expenditures can be deducted from his 1975 income, we must look to the facts as they existed on December 31, 1975, the day the curtain closed on the Schenks’ tax year. On that day it was by no means certain that Schenk would actually use his December 30 expenditure for the purchase of fertilizer in the following year.21 This fact leads us to conclude that under the rule set forth in Stice, Schenk’s December 30 expenditure was a mere deposit and not a bona fide prepayment.22
*320IV. CONCLUSION
In the proceedings below, the Tax Court refused to allow the Schenks to deduct certain prepaid farm expenses from their 1975 taxable income. We affirm, but not without a measure of reservation. We recognize that there is nothing in this record to suggest that the taxpayers in any way intended to defraud the government or that their prepayment of farm expenses materially distorted their income in 1975. However, in a case such as this, our ruling cannot turn upon the moral quality of the individual taxpayer’s conduct. The Code, with all of its permutations and cross-references, cannot be applied on an ad hominem or ad hoe basis. Principals of tax accounting cannot be tailor-made or customized to suit the needs of individual taxpayers. For better or for worse, ours is a system of laws and not men. We therefore must endeavor to fashion rules of general application which provide practical guidelines for taxpayers and collectors and which will prevent the unscrupulous from abusing the system.
Annualization is a fundamental tenent of our tax system, a keystone of our fiscal framework. At the end of each tax year, the curtain falls and the year’s transactions are reviewed. At that time, the taxpayer and tax collector must be able to look back over the year’s activity and determine with certainty whether or not a given expenditure constitutes a deductible expense. For this reason, a taxpayer must leave certain indelible transactional tracks for the tax collector to follow.
A payment cannot be characterized as a deductible fertilizer expense until it is clear that the expenditure will actually be used for the purchase of fertilizer. Because the taxpayers in this case retained the power to substitute nonfertilizer, nondeductible items in the years following their purported “prepayment,” we conclude that their expenditure cannot be characterized as a bona fide fertilizer prepayment. For this reason, the decision of the Tax Court must be and is hereby
AFFIRMED.