Commissioner of Internal Revenue v. Josephs

My understanding is that the Tax Court holds that a fiduciary, entitled to compensation for his services, who settles a dispute with the beneficiaries of his trust over his management of the trust estate, can, in his income tax return, take a deduction for the amount paid in settlement; that § 23 (a) (1) authorizes the taking of such a deduction by a professional fiduciary, and that § 23(a) (2) authorizes the deduction in the case of a casual fiduciary.

It is true that if the taxpayer’s payment to the beneficiaries of his trust in the instant case is to be taken as an admission that he had…