Thompson-Hayward Chemical Co. v. Commissioner
United States Tax Court
Held, that the deduction for officers' compensation by petitioner in the fiscal year ending January 31, 1947, constituted a class of deductions for that year which exceeded 115 per cent of the average amount of deductions of such class for the 4 previous taxable years and that petitioner, having met its burden of proof under section 433 (b) (10) (C), is entitled to have such excess disallowed in computing its average base period net income.
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Held, that the deduction for officers' compensation by petitioner in the fiscal year ending January 31, 1947, constituted a class of deductions for that year which exceeded 115 per cent of the average amount of deductions of such class for the 4 previous taxable years and that petitioner, having met its burden of proof under section 433 (b) (10) (C), is entitled to have such excess disallowed in computing its average base period net income. Held, further, that the adjustment provisions of section 452, which require an adjustment where a position is taken in the determination of excess profits…
1Opinion of the Court
Mtjlroney, Judge:
Respondent determined deficiencies in the petitioner’s income tax for the fiscal years ended January 31, 1951 and 1952, in the amounts of $11,722.06 and $1,066.28, respectively. The issues are (1) whether an increase in officers’ compensation in the fiscal year ending January 31, 1947, resulted in an abnormal deduction for that year within the meaning of section 433 (b) (9) and (10) of the 1939 Internal Revenue Code which would require adjustments in the petitioner’s excess profits tax credit used to determine petitioner’s income and excess profits tax liability for fiscal…
2Cases cited4 opinions
- Universal Optical Co. v. CommissionerUnited States Tax Court · 1948
- Mine & Smelter Supply Co. v. CommissionerUnited States Tax Court · 1948
- McKay Machine Co. v. CommissionerUnited States Tax Court · 1957
- National Biscuit Co. v. CommissionerUnited States Tax Court · 1957
3Cited by1 opinion
- Thompson-Hayward Chemical Co. v. CommissionerUnited States Tax Court · 1958