American Nat'l Bank v. Commissioner

1. The petitioner paid the capital stock taxes assessed against it by the State of Minnesota on the outstanding shares of its capital stock in the hands of its shareholders, charge such payments to expense, and did not withhold the amounts thereof from dividends due shareholders. Held, that in the circumstance herein the failure of the bank to collect the payments in question from dividends due its shareholders is in effect a distribution of surplus to such shareholders and is not an allowable deduction from petitioner's gross income, in either of the taxable years involved. 2. The petitioner…