Austin State Bank v. Commissioner
United States Tax Court
1. Petitioner was chartered as a bank under the laws of the State of Indiana and subject to supervision by a State agency. Petitioner made a small number of loans. Petitioner received deposits from the State and local governments, its employees and other parties related to petitioner's management, and unrelated sources. The deposits from related sources never exceeded 35 percent of the total deposits held by the bank.
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1. Petitioner was chartered as a bank under the laws of the State of Indiana and subject to supervision by a State agency. Petitioner made a small number of loans. Petitioner received deposits from the State and local governments, its employees and other parties related to petitioner's management, and unrelated sources. The deposits from related sources never exceeded 35 percent of the total deposits held by the bank. Petitioner had two full-time employees, was open for business six days a week, and offered banking services to the public. Held, petitioner was a bank under the definition…
1Opinion of the Court
IRWIN, Judge:
The respondent determined the following deficiencies in petitioner’s income taxes:
Calendar year Deficiency
1964 _$27,951.30
1965 _ 52,924.50
1966 _ 31,485. 51
These amounts relate to two issues which we must determine: (1) Whether petitioner’s business activities come within the 'ambit of the definition of a bank under section 5811 so that petitioner is exempt from the personal holding company tax imposed by section 541; and (2) whether 'amounts paid to two of petitioner’s officers as salary constitute reasonable compensation that is deductible under section 162. A third issue, the…
2Cases cited4 opinions
- Botany Worsted Mills v. United StatesSupreme Court of the United States · 1929
- Staunton Industrial L. Corp. v. Commissioner of Int. Rev.Court of Appeals for the Fourth Circuit · 1941
- Magruder v. Safe Deposit & Trust Co.Court of Appeals for the Fourth Circuit · 1941
- Mutual Sav. & Loan Co. v. CommissionerUnited States Board of Tax Appeals · 1941
3Cited by4 opinions
- MoneyGram International, Inc. v. CommissionerUnited States Tax Court · 2015
- Austin State Bank v. CommissionerUnited States Tax Court · 1971
- Medina v. CommissionerUnited States Tax Court · 1983
- MoneyGram International, Inc. and Subsidiaries v. CommissionerUnited States Tax Court · 2019