Ohio Battery & Ignition Co. v. Commissioner
United States Tax Court
Petitioner, an Ohio corporation on an accrual basis, was owned by two brothers and their wives, who were on a cash basis of accounting. The two men were petitioner's president and treasurer, respectively. In 1940 their total authorized salaries amounted to $ 11,000, and in 1941 their authorized salaries totaled $ 20,000. On December 31 of each year a substantial part of these salaries remained unpaid.
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Petitioner, an Ohio corporation on an accrual basis, was owned by two brothers and their wives, who were on a cash basis of accounting. The two men were petitioner's president and treasurer, respectively. In 1940 their total authorized salaries amounted to $ 11,000, and in 1941 their authorized salaries totaled $ 20,000. On December 31 of each year a substantial part of these salaries remained unpaid. On December 31 of each year the balance of the salaries was accrued and credited, without restriction as to time or manner of payment, to the respective accounts of the officers on petitioner's…
1Opinion of the Court
OPINION.
Disney, Judge:
The question presented is, are the provisions of section 24 (c) of the Internal Revenue Code1 applicable to the facts here, thus prohibiting the deductions for income tax purposes of the unpaid salary balances credited to petitioner’s officers for the years 1940 and 19411
It is uncontroverted that the contentions set forth in subdivisions (1), (2), and (3) of section 24 (c) must coexist in order to prevent such deductions. Petitioner concedes the applicability of subdivision (3), but contends (a) that the crediting of the unpaid part of the salaries to its officers’…
Also in this document: Concurrence.
2Cases cited2 opinions
- Michael Flynn Mfg. Co. v. CommissionerUnited States Tax Court · 1944
- P. G. Lake, Inc. v. CommissionerUnited States Tax Court · 1944
3Cited by42 opinions
- Clínica Dr. Mario Juliá, Inc. v. Secretario de HaciendaSupreme Court of Puerto Rico · 1954
- Geiger & Peters, Inc. v. CommissionerUnited States Tax Court · 1957
- Platt Trailer Co. v. CommissionerUnited States Tax Court · 1955
- Young Door Co., Eastern Div. v. CommissionerUnited States Tax Court · 1963
- Fetzer Refrigerator Co. And Louisville Cooler Mfg. Co. v. United StatesCourt of Appeals for the Sixth Circuit · 1971
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