Allen Industries, Inc. v. Commissioner of Internal Revenue

CELEBREZZE, Circuit Judge.

Appellant Taxpayer, Allen Industries, is appealing the decision of the Tax Court upholding a federal income tax deficiency assessment of $28,599.97. 1 The deficiency arose when the Commissioner disallowed deduction of payments to the widow of Sidney J. Allen as a business expense. The Tax Court found that the Taxpayer failed to prove that the payments to the widow were “necessary expenses” within the purview of Section 162 of the Internal Revenue Code of 1954.

Allen Industries was founded by the Allen family and incorporated under the laws of Delaware in 1927. Sidney…