Automatic Sprinkler Co. v. Commissioner
United States Board of Tax Appeals
The payment of D corporation to the Government of a lump sum in compromise of the liability of N corporation, its predecessor, for taxes, interest and penalties of earlier years, the amount of which is equal to 25 per cent of the assessment plus interest, is not deductible by D as a payment of interest to the extent of 25 per cent of the interest assessed, because (1) no part of the payment is identifiable, (2) the whole payment was consideration for D's purchase of N's…
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The payment of D corporation to the Government of a lump sum in compromise of the liability of N corporation, its predecessor, for taxes, interest and penalties of earlier years, the amount of which is equal to 25 per cent of the assessment plus interest, is not deductible by D as a payment of interest to the extent of 25 per cent of the interest assessed, because (1) no part of the payment is identifiable, (2) the whole payment was consideration for D's purchase of N's assets, and was neither D's taxes nor interest.
1Opinion of the Court
AUTOMATIC SPRINKLER COMPANY OF AMERICA, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
Automatic Sprinkler Co. v. Commissioner
Docket No. 60887.
United States Board of Tax Appeals
27 B.T.A. 160; 1932 BTA LEXIS 1118;
November 28, 1932, Promulgated
The payment of D corporation to the Government of a lump sum in compromise of the liability of N corporation, its predecessor, for taxes, interest and penalties of earlier years, the amount of which is equal to 25 per cent of the assessment plus interest, is not deductible by D as a payment of interest to the extent of 25 per cent of the…
2Cases cited1 opinion
- Automatic Sprinkler Co. v. CommissionerUnited States Board of Tax Appeals · 1932