Harrington Co. v. Commissioner
United States Tax Court
Taxpayer corporation, keeping books on the accrual basis, voted additional compensation to officers who agreed to contribute the sums voted to surplus. Corporate tax return Forms 1120 and 1121 were timely filed, each bearing no statement of income or deductions, but showing an estimate of tax due and a notation that "Due to sickness and/or the exigencies of the National Emergency the detailed figures will be included in amended return."
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Taxpayer corporation, keeping books on the accrual basis, voted additional compensation to officers who agreed to contribute the sums voted to surplus. Corporate tax return Forms 1120 and 1121 were timely filed, each bearing no statement of income or deductions, but showing an estimate of tax due and a notation that "Due to sickness and/or the exigencies of the National Emergency the detailed figures will be included in amended return." Itemized returns were filed 60 days after the return due date. Held: (1) Since liability for the compensation voted was contingent on the officers…
1Opinion of the Court
OPINION.
Hill, Judge:
We are first called upon to consider whether respondent correctly disallowed $12,000 of the amount which petitioner deducted as compensation of officers from its gross income for 1940 and $17,750 of a similar deduction from the 1941 income. Section 23 (a) (1) (A) of the Internal Revenue Code authorizes the deduction of reasonable allowances “paid or incurred” as compensation to corporation officers for services actually rendered. Allowance of the claimed deductions must be based upon facts sufficient to bring them within this provision. The burden of proving these facts is…
2Cases cited6 opinions
- Dixie Pine Products Co. v. CommissionerSupreme Court of the United States · 1944
- Michael Flynn Mfg. Co. v. CommissionerUnited States Tax Court · 1944
- Economy Sav. & Loan Co. v. CommissionerUnited States Tax Court · 1945
- Shield Co. v. CommissionerUnited States Tax Court · 1943
- Burford Oil Co. v. CommissionerUnited States Tax Court · 1945
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3Cited by13 opinions
- Sanders v. CommissionerUnited States Tax Court · 1954
- United Control Corp. v. CommissionerUnited States Tax Court · 1962
- E. B. & A. C. Whiting Co. v. CommissionerUnited States Tax Court · 1948
- Arcade Realty Co. v. CommissionerUnited States Tax Court · 1960
- Maggio Bros. Co. v. CommissionerUnited States Tax Court · 1946
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