East Tennessee Motor Company v. United States

KENT, Circuit Judge.

This is an appeal by the plaintiff-appellant from a jury verdict for the defendant-appellee in an action for refund of corporate income taxes. The appellant is a Tennessee corporation located in Knoxville, Tennessee, its stock is closely held.

The suit for refund arises out of deficiencies assessed by the Commissioner of Internal Revenue because of unreasonable compensation paid to stockholders. The allowance of a deduction [from income] is a matter of legislative grace, and thus, any dispute concerning any deductions must look to the Statute. New Colonial Ice Co. v.…