United Mercantile Agencies, Inc. v. Commissioner
United States Tax Court
1. The two principal officers of a corporation, who owned or controlled all of the outstanding capital stock, removed checks from the corporation's incoming mail basket, cashed the checks, and divided the proceeds in ratio to the amount of common stock owned or controlled. Held, the diverted funds are taxable as ordinary income to the corporation which is not entitled to an offsetting embezzlement loss under section 23 (f) of the 1939 Code.
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1. The two principal officers of a corporation, who owned or controlled all of the outstanding capital stock, removed checks from the corporation's incoming mail basket, cashed the checks, and divided the proceeds in ratio to the amount of common stock owned or controlled. Held, the diverted funds are taxable as ordinary income to the corporation which is not entitled to an offsetting embezzlement loss under section 23 (f) of the 1939 Code. Held, further, accrued but unpaid Federal taxes are not deductible in determining the amount of the earnings and profits of a cash basis corporation.…
1Opinion of the Court
United Mercantile Agencies, Incorporated, Petitioner, v. Commissioner of Internal Revenue, Respondent. F. W. Drybrough, Petitioner, v. Commissioner of Internal Revenue, Respondent. L. N. Simpson, Petitioner, v. Commissioner of Internal Revenue, Respondent
United Mercantile Agencies, Inc. v. Commissioner
Docket Nos. 40028, 40029, 40030
United States Tax Court
23 T.C. 1105; 1955 U.S. Tax Ct. LEXIS 216;
March 31, 1955, Filed
Decisions will be entered under Rule 50.
1. The two principal officers of a corporation, who owned or controlled all of the outstanding capital stock, removed checks from the…
2Cases cited19 opinions
- Commissioner v. WilcoxSupreme Court of the United States · 1946
- Healy v. CommissionerSupreme Court of the United States · 1953
- Kann v. Commissioner of Internal Revenue. Kann's Estate v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1954
- Chesbro v. CommissionerUnited States Tax Court · 1953
- Vassallo v. CommissionerUnited States Tax Court · 1955
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