Marco Associates, Inc. v. Comptroller of the Treasury

When the Comptroller assessed an income tax deficiency of $6,794.23 for the fiscal period ended 30 April 1968 against Marco Associates, Inc. (Marco), the taxpayer sought to overturn the assessment on an appeal to the Maryland Tax Court. From an adverse ruling there, Marco appealed to the Circuit Court for Montgomery County, which affirmed, and from the circuit court to this Court.

Marco, a Maryland corporation, had elected to be taxed, for federal income tax purposes, as a Subchapter S corporation, as permitted by Internal Revenue Code, 26 U.S.C. § 1371 et seq. with the consequence that its…