Michael Flynn Mfg. Co. v. Commissioner
United States Tax Court
Petitioner, a corporation on an accrual basis, accrued salaries to the credit of its two principal officers, who were also indirectly its controlling stockholders. The officers did not draw their salaries in the taxable years, although ample funds were available for their payment.
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Petitioner, a corporation on an accrual basis, accrued salaries to the credit of its two principal officers, who were also indirectly its controlling stockholders. The officers did not draw their salaries in the taxable years, although ample funds were available for their payment. Held, that section 24 (c) of the Internal Revenue Code may not be interposed to disallow to petitioner the deduction of the accrued expenses for salaries, since the salaries were includible in the gross income of the officers in the taxable years under the doctrine of constructive receipt and the condition to…
1Opinion of the Court
OPINION.
Hill, Judge:
The first issue for decision, and the only one on which the burden of proof rests with petitioner, is whether petitioner is entitled to deduct salaries awarded and accrued in the years 1939 and 1940 to the credit of Frank F. Flynn and Charles M. Flynn, its principal officers and controlling stockholders. The Flynns both rendered active service to petitioner and petitioner properly may deduct the obligations incurred for their salaries under section 23 (a) (1) of the Internal Revenue Code unless prevented from so doing by section 24 (c). Thus, we must determine whether the…
2Cited by64 opinions
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- Carter v. CommissionerUnited States Tax Court · 1947
- Fountain v. CommissionerUnited States Tax Court · 1973
- Ohio Battery & Ignition Co. v. CommissionerUnited States Tax Court · 1945
- Platt Trailer Co. v. CommissionerUnited States Tax Court · 1955
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