New York Post Corp. v. Commissioner
United States Tax Court
During 1955 and 1956 petitioner-employer had in effect a multipurpose plan, referred to in its contract with the union as "Severance Pay," which provided not only for a dismissal wage but also payments to employees upon voluntary termination of employment after becoming 65 years of age or completing 25 years of service.
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During 1955 and 1956 petitioner-employer had in effect a multipurpose plan, referred to in its contract with the union as "Severance Pay," which provided not only for a dismissal wage but also payments to employees upon voluntary termination of employment after becoming 65 years of age or completing 25 years of service. Held, the payments upon voluntary termination of service constitute deferred compensation within section 404, I.R.C. 1954, and therefore may not be deducted even by an accrual basis taxpayer prior to the year such payments are actually made.
1Opinion of the Court
OPINION
Raum, Judge:
Petitioner, New York Post Corp., has been a newspaper publisher in New York for many years. It keeps its books and files its income tax returns on an accrual basis of accounting. The question for decision is whether it may deduct on its 1955 and 1956 returns the amounts of $28,987.11 and $33,513.58, respectively, which allegedly accrued in those years in respect of so-called severance pay to employees who had completed 25 years of service or attained 65 years of age but whose employment had not yet been terminated. It claims the deduction under section 162(a) (1) of the…
2Cases cited5 opinions
- United States v. AndersonSupreme Court of the United States · 1926
- Helvering v. Wilshire Oil Co.Supreme Court of the United States · 1939
- Champion Spark Plug Co. v. CommissionerUnited States Tax Court · 1958
- Commissioner of Internal Revenue v. Champion Spark Plug CompanyCourt of Appeals for the Sixth Circuit · 1959
- Gayner v. the New OrleansDistrict Court, N.D. California · 1944
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- Jacobs v. CommissionerUnited States Tax Court · 1965
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