New York Talking Machine Co. v. Commissioner

*160OPINION.

Smith :

With the invested capital question contained in the second assignment of error settled by stipulation, the only remaining issue on the merits is that of the salary deductions for the years 1918 and 1919. The respondent contends that the salary deductions taken in *161the petitioners’ returns for those years and now claimed as an expense deduction are unreasonably large an'd represent a distribution of dividends in the guise of compensation for services rendered. It same was duly authorized by the petitioners’ directors.

We do not believe that the facts which we have set out above at…