Model Dairy, Inc. v. Commissioner
United States Board of Tax Appeals
In January, 1922, petitioner authorized additional salaries for its officers and employees for the years 1920 and 1921 and paid such additional compensation in the years 1922 and 1923. Held, that in the absence of proof that the combined regular and additional salaries paid in 1922 and 1923 were no more than reasonable compensation for personal services rendered, the payments so made are not deductible from petitioner's income in the respective years as ordinary and…
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In January, 1922, petitioner authorized additional salaries for its officers and employees for the years 1920 and 1921 and paid such additional compensation in the years 1922 and 1923. Held, that in the absence of proof that the combined regular and additional salaries paid in 1922 and 1923 were no more than reasonable compensation for personal services rendered, the payments so made are not deductible from petitioner's income in the respective years as ordinary and necessary operating expenses.
1Opinion of the Court
*548OPINION.
Lansdon:
In its brief the petitioner concedes that the additional compensations of officers and stockholders in the amounts of $11,940, paid in 1922 and 1923 respectively, are not proper deductions from gross income for the respective years 1920 and 1921. It remains, therefore, only for us to determine whether such payments may be deducted from the gross income of the petitioner as ordinary and necessary business expenses in 1922 and 1923, respectively.
Since the petitioner abandons its contentions as to the years 1920 and 1921, the Kevenue Act of 1921 is applicable to the situation…
2Cited by2 opinions
- Barto Co. v. CommissionerUnited States Board of Tax Appeals · 1931
- Model Dairy, Inc. v. CommissionerUnited States Board of Tax Appeals · 1928