People ex rel. Freeborn & Co. v. Graves

This is a review by certiorari of a final determination of the State Tax Commission affirming an annual franchise tax assessed against relator under article 9-A of the Tax Law, for the tax year beginning November 1, 1928, measured by the net income of the corporation for the year 1927.

*53411 The entire issue relates to the reasonableness of salaries of officers deducted as business expenses and whether there has been a diversion of profits under the guise of salaries.

The relator is engaged in the insurance brokerage business in the city of New York. Its capital stock consisted of 500 shares of the…