Frost v. Commissioner ( 1929 )

CHARLES FROST, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Frost v. Commissioner

Docket No. 26422.

United States Board of Tax Appeals

16 B.T.A. 554; 1929 BTA LEXIS 2563;

May 14, 1929, Promulgated

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Amount of deductions for wages or salaries paid in the taxable years determined.

Charles Frost pro se.

Arthur Carnduff, Esq., for the respondent.

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MARQUETTE

This proceeding is for the redetermination of deficiencies in income tax asserted by the respondent in the amounts of $2,762.58 for 1922, $947.04 for 1923, and $1,598.10 for 1924. The deficiencies arise from the disallowance of deductions taken by the petitioner on account of wages or salaries alleged to have been paid in the taxable years.

FINDINGS OF FACT.

The petitioner is an individual residing at Larchmont, N.Y.

During the years 1922, 1923, and 1924, the petitioner was a certified public accountant engaged in the practice of accountancy at New York City. In those years he was employed to do considerable special accounting and he employed at various times other persons to assist him in that work. He paid the persons so employed by him wages or salaries in the amounts of $16,320 in 1922; $19,250 in 1923, and $20,895 in 1924.

The petitioner maintained a set of books which were kept on the basis of cash receipts and disbursements, and there were entered therein during the years 1922, 1923, and 1924, all amounts received by him and the amounts expended, including the said salaries paid to the persons employed by him. The petitioner's books were stolen in 1925.

In his income-tax returns for the years 1922, 1923, and 1924, the petitioner deducted from gross income the said amounts of $16,320 for 1922, $19,250 for 1923, and $20,895 for 1924, as salaries paid to said employees. The respondent disallowed $11,200 of the deduction claimed for 1922; $12,130 of the deduction for 1923, and the entire deduction for 1924.

OPINION.

MARQUETTE: We are satisfied from the evidence that the petitioner, in the conduct of his business, employed a number of persons in the years 1922 to 1924, inclusive, and that he paid them salaries as claimed by him in his returns. The amounts of the salaries are properly deductible in computing the petitioner's net income for the taxable years.

Judgments of no deficiencies will be entered for petitioner.