CF MEDARIS CO. v. Commissioner of Internal Revenue

MOORMAN, Circuit Judge.

The petitioner is engaged in soliciting insurance and in acting as financial agent in negotiating loans upon real estate. In 1920 and 1921 it sought and was denied classification as a personal service corporation for the purpose of income taxes. The statute (Revenue Act of 1918, c. 18, 40 Stat. 1057) allows a corporation such classification if its income (1) is to be ascribed primarily to the activities of the principal owners or stockholders; (2) the principal owners or stockholders are themselves regularly engaged in the active conduct of its affairs; and (3) capital,…