New Oakmont Corporation v. United States

MADDEN, Judge.

In its Personal Holding Company tax return for the year 1937 the plaintiff, in computing its adjusted net income, deducted $52,324.38 as additional income tax paid by it in 1937 for the year 1933. It was admittedly entitled to make this deduction, unless the $52,324.38 was a payment of the kind of taxes imposed by Section 104 of the Revenue Act of 1932, 26 U.S.C.A.Int. Rev.Acts, page 508, such taxes being in the nature of a penalty imposed on a corporation for permitting itself to be used to accumulate gains for its stockholders which, not being distributed to the stockholders,…