Case Name: Brown Agency, Inc., Petitioner, v. Commissioner of Internal Revenue, Respondent
Court: United States Board of Tax Appeals
Jurisdiction: United States
Decision Date: 1931-01-12
Citations: 21 B.T.A. 1111
Docket Number: Docket No. 38939
Parties: Brown Agency, Inc., Petitioner, v. Commissioner of Internal Revenue, Respondent.
Judges: 
Reporter: Reports of the United States Board of Tax Appeals
Volume: 21
Pages: 1111–1114

Head Matter:
Brown Agency, Inc., Petitioner, v. Commissioner of Internal Revenue, Respondent.
Docket No. 38939.
Promulgated January 12, 1931.
Joseph Boulonf, G. P. A., for the petitioner.
Broohs Fullerton, Esq., for the respondent.

Opinion:
OPINION.
Trusseil:
The evidence shows and there has nowhere in this case been any question but that the services of the officers of the petitioner were actually rendered. At the hearing the respondent admitted that evidence adduced at the hearing, which had never been previously put before the respondent, lead unavoidably to the conclusion that the officers' salaries were duly authorized by the board of directors of the petitioner, and the issue is now reduced to the question whether the salaries are reasonable in amount. After a careful consideration of the facts before us we have included in the findings the fact that the salaries authorized are reasonable. This concludes the case. Reasonable allowances for salaries or other compensation for personal services actually rendered are specifically allowable as deductions under section 234 (a) (1) of the Revenue Act of 1926. It must be observed, however, that the petitioner reported on the accrual basis, so that neither the initial premiums incurred in 1925 nor the income from commissions on these premiums earned in 1925 are to be considered in determining the net income for 1926. The premiums which are allowable as deductions were incurred and, it so happens, were also paid in the fall of the taxable year in the amount of $1,197.60. Net income should be recomputed accordingly.
Judgment will be entered pursuant to Rule 50.