Case ID: bta_8/html/0979-01.html
Source: Caselaw Access Project
Author: {"author": "TRAmmell:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Leon Salomon, Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 12231.
    Promulgated October 24, 1927.
    Community Property. — Petitioner and his wife in 1921 were residents of California. For that year they filed separate returns, the wife reporting as income the salary paid her by the petitioner for services rendered him in his business, which salary she had invested. The household expenses were paid by the petitioner. 
      Helé, that the Commissioner erred in including the salary of the wife in the income of the petitioner.
    
      Jerome H. Bayer, Esq., for the petitioner.
    
      A. H. Fast, Esq., for the respondent.
    This is a proceeding for the redetermination of a deficiency in income tax in the amount of $300.88 for the calendar year 1921. The question involved is whether under the laws of California and the Revenue Act of 1921 the Commissioner erred in including in the income of the petitioner an amount claimed to represent the separate income of the wife of the petitioner.
    It was stipulated that the issues of fact should be determined solely upon the evidence offered in the case of Leon Salomon, Docket No. 3725, save and except the year and the amount of alleged deficiency involved. The above-entitled case was decided by the Board September 17, 1926, and is reported in 4 B. T. A. 1109.
    FINDINGS OF FACT.
    The petitioner is an optician engaged in business in San Francisco, Calif. During the taxable year involved he was married and living with his wife in the State of California. During the past 10 years the petitioner’s wife, Della B. Salomon, has assisted him in his business by acting as bookkeeper, keeping rocords, sending out notices, and performing other clerical duties in the office. The duties of the wife in the office of the petitioner occupied the greater part of her time. For the year involved the petitioner paid his wife a salary of $300 per month, or $3,600 for the year, which she invested in certain bonds. The petitioner paid the household expenses of himself and of his wife.
    The petitioner and his wife filed separate income-tax returns for the year 1921. The petitioner in his return claimed, among other deductions, one for salaries and wages in which was included the amount of $3,600 paid to his wife. The petitioner’s wife in her return reported, among other items of income, the amount of $3,600 as salary received from the petitioner.
    The Commissioner computed the deficiency here involved by including in income the item of $3,600 based upon an amended return filed by a revenue agent under section 3176 of the Revised Statutes.
   OPINION.

TRAmmell:

This case is controlled by our decision in the case of Leon Salomon, 4 B. T. A. 1109, in which the same state of facts for 1922 was considered. There we held that the Commissioner erred in including in the income of the petitioner the salary, of the petitioner’s wife in the amount of $3,600.

Judgment will be entered for the petitioner on IB days' notice, under Rule 50.

Considered by Mokhis, Mtordock, and Siefkin.