Comeaux v. Commissioner
United States Tax Court
1. Where the operator of a "horse-book" establishment where bets on horse races were illegally made, paid sums of money for protection from arrests and prosecution, held, such payments are contrary to public policy and are not deductible in determining net income. 2. The expenses of actually earning income in illegal businesses are deductible in computing net income subject to tax. 3. Fraud penalties approved.
1Opinion of the Court
OPINION.
Van Fossan, Judge:
This case is a companion case with Max Cohen, 9 T. C. 1156, and Robert L. Carnahan, 9 T. C. 1206. Although tried and submitted on the same record' and, in some respects inextricably interlocked with the cited cases, the issues differ. The first is the matter of protection payments.
We have found in effect that Cohen and Carnahan held themselves out as vendors of protection and actually undertook to provide such protection to the illegal business of the Lawrence Commission Co. These conclusions are supported by the direct testimony of various witnesses and corroborated…
2Cases cited2 opinions
- Commissioner v. HeiningerSupreme Court of the United States · 1943
- Cohen v. CommissionerUnited States Tax Court · 1947
3Cited by23 opinions
- Cohen v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1949
- Clark v. CommissionerUnited States Tax Court · 1952
- Thomas v. CommissionerUnited States Tax Court · 1951
- Nunez v. Comm'rUnited States Tax Court · 1969
- Chesterfield Textile Corp. v. CommissionerUnited States Tax Court · 1958
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