Hooker Electrochemical Co. v. Commissioner
United States Tax Court
Petitioner corporation declared year end bonuses to officers and employees, to be paid unless prohibited by emergency price control legislation. Upon advice of its attorney that such payments were not prohibited under the law, checks were issued and delivered without restriction.
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Petitioner corporation declared year end bonuses to officers and employees, to be paid unless prohibited by emergency price control legislation. Upon advice of its attorney that such payments were not prohibited under the law, checks were issued and delivered without restriction. Held, amounts so paid its president and vice president, the individual petitioners here, were properly accrued by the corporations and constructively received by the individuals for tax purposes in 1942, even though the individuals on their own initiative refrained from cashing the checks until 1943, when they…
1Opinion of the Court
OPINION.
Kern, Judge:
The issue, as it relates to petitioner Hooker Electrochemical Co., is whether the amounts of bonus payments awarded by its board of directors on November 12,1942, were properly accruable as an ordinary and necessary expense of doing business during its fiscal year ended November 30,1942.
The facts are all set out in detail and we refrain from unnecessary repetition thereof.
The Internal Revenue Code, in section 43, provides that deductions:
* * * shall be taken for the taxable year in which “paid or accrued” or “paid or incurred”, dependent upon the method of accounting upon…
2Cases cited3 opinions
- Lavery v. CommissionerUnited States Tax Court · 1945
- Smith--Lustig Paper Box Mfg. Co. v. CommissionerUnited States Tax Court · 1943
- Tufts v. CommissionerUnited States Tax Court · 1946
3Cited by1 opinion
- Hooker Electrochemical Co. v. CommissionerUnited States Tax Court · 1947