Case Name: Fuller Brush Co., Petitioner, v. Commissioner of Internal Revenue, Respondent
Court: United States Board of Tax Appeals
Jurisdiction: United States
Decision Date: 1927-10-17
Citations: 8 B.T.A. 855
Docket Number: Docket No. 10487
Parties: Fuller Brush Co., Petitioner, v. Commissioner of Internal Revenue, Respondent.
Judges: Considered by Lansdon and Green.
Reporter: Reports of the United States Board of Tax Appeals
Volume: 8
Pages: 855–856

Head Matter:
Fuller Brush Co., Petitioner, v. Commissioner of Internal Revenue, Respondent.
Docket No. 10487.
Promulgated October 17, 1927.
Warren M. Brown, G.P. A., for the petitioner.
J. W. Fisher, Esq., for the respondent.

Opinion:
OPINION.
ARundbll :
We have held that contingent reserves may not be deducted from income under the several revenue acts. Consolidated Asphalt Co., 1 B. T. A. 79; Uvalde Co., 1 B. T. A. 932; Pan-American Hide Co., 1 B. T. A. 1249; M. I. Stewart & Co., 2 B. T. A. 737; Crescent Cotton Co., 5 B. T. A. 850.
Before an employee became entitled to a bonus he must have remained in petitioner's employ for at least one year and must moreover have sold a certain amount of merchandise. On December 31, 1921, none of the employees for whom the reserve of $40,000 was established had been in petitioner's employ for one year and no evidence was introduced as to the volume of their sales, or indeed what amount of merchandise they must sell to entitle them to a bonus. Petitioner's liability being purely contingent, the deduction was properly disallowed.
Judgment will be entered for the respondent.
Considered by Lansdon and Green.