New York Seven-Up Bottling Co. v. Commissioner
United States Tax Court
In 1956 petitioner executed a collective-bargaining agreement with the Soft Drink Workers Union, Local 812. The agreement contained a severance-pay provision. In 1959 petitioner executed another agreement with the union which eliminated the severance-pay benefit and provided that petitioner would contribute to a union retirement fund. The 1959 agreement also froze any benefits under the 1956 severance-pay provision.
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In 1956 petitioner executed a collective-bargaining agreement with the Soft Drink Workers Union, Local 812. The agreement contained a severance-pay provision. In 1959 petitioner executed another agreement with the union which eliminated the severance-pay benefit and provided that petitioner would contribute to a union retirement fund. The 1959 agreement also froze any benefits under the 1956 severance-pay provision. In its return for its taxable year ending on Mar. 31, 1960, petitioner deducted its entire remaining liability under the 1956 severance-pay provision. Held, sec. 404(a) (5),…
1Opinion of the Court
Fat, Judge:
Respondent determined a deficiency of $19,124.01 in petitioner’s income tax for the taxable year 1960.
Petitioner conceded all the issues raised in the pleadings except one. The issue left for decision is whether section 404(a) (5)1 prohibits petitioner from deducting in its taxable year 1960 the sum of $36,-716.95 which it accrued on its books as a liability for severance pay under a union contract or, in the alternative, if section 404(a) (5) does not prohibit petitioner from taking said deduction, whether it is entitled to the deduction under sections 162 and 446. During the…
2Cases cited2 opinions
- New York Post Corp. v. CommissionerUnited States Tax Court · 1963
- Jacobs v. CommissionerUnited States Tax Court · 1965
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- Harry A. Wellons, Jr., M.D., S.C. v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1994
- Lundy Packing Company v. United StatesDistrict Court, E.D. North Carolina · 1969
- Springfield Productions, Inc. v. CommissionerUnited States Tax Court · 1979
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