Kelley-Dempsey & Co. v. Commissioner
United States Board of Tax Appeals
Payments made by petitioner to an employee of a company for which it was laying pipe lines under contract, for the purpose of securing relief from arbitrary and impeding demands of the company's inspectors and the prompt delivery of materials, held not an ordinary and necessary business expense.
1Opinion of the Court
*353OPINION.
GOODRICH:
The testimony tells a tale of graft. Petitioner was held up and had to pay. Until it did, the work under its contracts *354was impeded through harrassing tactics by gas company employees who demanded subsidies before they would honestly discharge their duties; it lost money. After it “ greased some palms ”, its work was accepted, promptly and without question; its contracts were completed within the allotted time or before; it made profits.
Payments made in 1929 to Evanoif and Gaston for so-called cooperation are not here in issue — why not, we are not told. The question presented…
2Cases cited3 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- United States v. SullivanSupreme Court of the United States · 1927
- Kornhauser v. United StatesSupreme Court of the United States · 1928
3Cited by6 opinions
- Rugel v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1942
- Finley v. CommissionerUnited States Tax Court · 1957
- Kanelos v. CommissionerUnited States Tax Court · 1943
- Kelley-Dempsey & Co. v. CommissionerUnited States Board of Tax Appeals · 1934
- Newman v. CommissionerUnited States Tax Court · 1952
1 more not listed; retrieve them via the Exa API.