Brizell v. Commissioner
United States Tax Court
From 1975 through 1979, C, a subchapter S corporation engaged in printing, paid kickbacks to the purchasing agents of various customers. Held, the payments constitute ordinary and necessary business expenses deductible under sec. 162(a). Held, further, R has failed to prove, by clear and convincing evidence, that the kickbacks were illegal under local law and are therefore nondeductible under sec. 162(c)(2).
1Opinion of the Court
WELLS, Judge:
Respondent determined the following deficiencies in income tax and additions to tax:
Section 6653(b)1
Petitioners Year Deficiency addition
Murray Brizell and Harriet Brizell 1975 $70,003 $37,663 1976 79,955 42,907 1977 51,450 27,248 1978 37,347 18,674 1979 38,524 19,262
Arnold D. Daniels and Arline Daniels 1975 69,971 37,646 1976 80,792 42,790 1977 53,603 28,368 1978 36,793 18,397 1979 31,959 15,980
The issues presented are (1) whether a subchapter S corporation may deduct certain payments as ordinary and necessary business expenses under section 162(a), (2) whether the payments were…
2Cases cited26 opinions
- Deputy, Administratrix v. Du PontSupreme Court of the United States · 1940
- Commissioner v. HeiningerSupreme Court of the United States · 1943
- Commissioner v. TellierSupreme Court of the United States · 1966
- United States v. Irving B. Kahn and Teleprompter CorporationCourt of Appeals for the Second Circuit · 1973
- Boser v. CommissionerUnited States Tax Court · 1981
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3Cited by15 opinions
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- Bilzerian v. United StatesUnited States Court of Federal Claims · 1998
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