Commissioner of Internal Revenue v. H. B. Ives Company

HINCKS, Circuit Judge.

The Commissioner petitions for review of a Tax Court holding that an authorization of expenditure by the respondent’s board of directors was an accrued liability in the year of authorization.

Taxpayer reports its income on an accrual basis. On November 24, 1953, desiring to benefit four elderly employees who had not qualified for the company pension plan, the board of directors resolved that “$22,000 be appropriated and set aside immediately for the purchase of annuity contracts for the four employees, that the President be authorized to negotiate with various insurance…