Case Name: COMMISSIONER OF INTERNAL REVENUE, Petitioner, v. Robert H. MILLER and Doris K. Miller, Respondents
Court: United States Court of Appeals for the Ninth Circuit
Jurisdiction: United States
Decision Date: 1955-11-17
Citations: 227 F.2d 326
Docket Number: No. 14735
Parties: COMMISSIONER OF INTERNAL REVENUE, Petitioner, v. Robert H. MILLER and Doris K. Miller, Respondents.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 227
Pages: 326–327

Head Matter:
COMMISSIONER OF INTERNAL REVENUE, Petitioner, v. Robert H. MILLER and Doris K. Miller, Respondents.
No. 14735.
United States Court of Appeals Ninth Circuit.
Nov. 17, 1955.
H. Brian Holland, Asst. Atty. Gen., John Potts Barnes, Chief Counsel, I. R. S., Chicago, Ill., Ellis N. Slack, Robert N. Anderson, S. Dee Hanson, Spe. Assts. to Atty. Gen., for petitioner.
Max B. Lewis, Salt Lake City, Utah, Tippit, Haskell & Welborn, Floyd K. Has-kell, Denver, Colo., Gustin, Richards & Mattsson, Harley W. Gustin, Salt Lake City, Utah, for respondents.
Before HEALY and FEE, Circuit Judges, and WALSH, District Judge.

Opinion:
PER CURIAM.
This matter is before us on petition to review a decision of the Tax Court.
The Commissioner assessed deficiencies in respondents' income taxes paid for the years 1948 and 1949. On redeter-mination the Tax Court held with the taxpayers. The question presented is whether first-year rentals paid the government by respondents in obtaining noncompetitive oil and gas leases are ordinary and necessary business expenses deductible as rentals under § 23 (a) (1) (A) of the 1939 Internal Revenue Code, 26 U.S.C.A. § 23(a) (1) (A), or whether, as contended by the Commissioner, they constituted capital expenditures recoverable only through depletion deductions.
In holding that the rentals paid were true rentals, and therefore deductible as business expenses, the Tax Court followed its earlier decision in Olen F. Featherstone, 22 T.C. 763, which latter was reviewed and unanimously upheld by the full court. The Tenth Circuit in the cognate case of United States v. Dougan, 214 F.2d 511, reached the same conclusion. We are satisfied that these holdings are correct, and the decision below is accordingly affirmed.