L. Schepp Co. v. Commissioner
United States Board of Tax Appeals
1. Upon consideration of the services actually performed, the amount of $4,000 is determined to be a reasonable allowance for the salary of an officer and director of a corporation who, together with a relative, owned all the capital stock. 2. The deduction for salaries of corporate officers is limited to amounts which are reasonably commensurate with the personal services actually rendered, and, though the judgment of corporate directors is not to be disregarded, there is…
Read the full summary
1. Upon consideration of the services actually performed, the amount of $4,000 is determined to be a reasonable allowance for the salary of an officer and director of a corporation who, together with a relative, owned all the capital stock. 2. The deduction for salaries of corporate officers is limited to amounts which are reasonably commensurate with the personal services actually rendered, and, though the judgment of corporate directors is not to be disregarded, there is no rule that it is conclusive or that it comports with the statutory qualifications of the tax deduction. 3. The test of…
1Opinion of the Court
*428OPINION.
SteRnhagen:
Of numerous assignments of error in the respondent’s determination of deficiency, there remain five principal issues to be decided by the Board, and these will be taken up in order.
1. Salary. — The petitioner paid Florence Schepp $20,000 in 1918 by crediting the amount to her personal account on its books, from which her personal bills were paid and debited. The petitioner deducted this amount among its business expenses, the Commissioner disallowed the deduction entirely, and the petitioner now assails this disallowance.
The Revenue Act of 1918, section 234 (a) (1), permits…
2Cases cited5 opinions
- Botany Worsted Mills v. United StatesSupreme Court of the United States · 1929
- Gayler v. WilderSupreme Court of the United States · 1851
- Marsh v. Nichols, Shepard & Co.Supreme Court of the United States · 1888
- United States v. Philadelphia Knitting Mills Co.Court of Appeals for the Third Circuit · 1921
- Baldwin Co. v. R. S. Howard Co.Court of Appeals for the Second Circuit · 1916
3Cited by133 opinions
- Stone v. CommissionerUnited States Tax Court · 1971
- William J. Drieborg and Laura D. Drieborg v. Commissioner of Internal Revenue, William J. Drieborg v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1955
- B. B. Carter and Mrs. Tommie v. Carter v. Ellis Campbell, Jr., Director of Internal RevenueCourt of Appeals for the Fifth Circuit · 1959
- Estate of Beck v. Comm'rUnited States Tax Court · 1971
- Federbush v. CommissionerUnited States Tax Court · 1960
128 more not listed; retrieve them via the Exa API.