E. Wagner & Son v. Commissioner of Internal Revenue

MATHEWS, Circuit Judge

(dissenting).

The Board of Tax Appeals had two questions before it. The first was: What salaries or compensation would have been reasonable salaries or compensation for personal services actually rendered by petitioner’s officers, E. Wagner and Otto H. Wagner, in 1929?

The Board found that reasonable salaries or compensation for such services would have been $4,000 and $10,000, respectively. I agree with my associates that this finding is supported by substantial evidence and is, therefore, conclusive.

The other question before the Board was: What interest accrued in 1929 on indebtedness owing by petitioner ?

This was a question of fact, as to which the Board should have made, but did not make, a specific finding. Such a finding is necessary to a decision and should be made by the Board, not by this court. In reviewing decisions of the Board, we are not authorized to make findings of fact. Our review is limited to questions of law. Belridge Oil Co. v. Helvering, 9 Cir., 69 F.2d 432, 433; Anderson v. Commissioner, 9 Cir., 78 F.2d 636, 637; Doernbecher Mfg. Co. v. Commissioner, 9 Cir., 80 F.2d 573, 574; Eaton v. Commissioner, 9 Cir., 81 F.2d 332, 334; Fulton Oil Co. v. Commissioner, 9 Cir., 81 F.2d 330, 332; Diller v. Commissioner, 9 Cir., 91 F.2d 194, 195; Von’s Investment Co. v. Commissioner, 9 Cir., 92 F.2d 861.

The Board’s statement that “petitioner has failed to prove that it is entitled to any larger deduction for interest than the amount allowed by the Commissioner” is not a finding of fact, nor does the record warrant any such statement. The evidence establishes conclusively, I think, that petitioner was entitled to a larger deduction for interest than the Commissioner allowed. The fact, if it be a fact, that petitioner did not show the precise amount of such allowable deduction does not excuse the Board’s failure to make a finding on this question, or justify its conclusion that the Commissioner’s determination must, therefore, be sustained. Compare Helvering v. Taylor, 293 U.S. 507, 514, 55 S.Ct. 287, 290, 79 L.Ed. 623.

The decision should be reversed and the. case should be remanded to the Board, with directions to find specifically what interest accrued in 1929 on indebtedness owing by petitioner, and thereupon to render such decision as the facts may warrant. To enable it to make such finding, the Board should be authorized to take further evidence or, if tendered, a stipulation by the parties.