Court Opinion

ID: 4603710
Source: CourtListenerOpinion
Date Created: 2020-11-20 19:32:36.115595+00
Date Added: 2024-06-11T07:52:53.999824
License: Public Domain

AGNES B. C. CHORMANN AND HENRY C. CHORMANN, EXECUTORS, ESTATE OF FREDERICK CHORMANN, PETITIONERS, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Chormann v. CommissionerDocket No. 10345.United States Board of Tax Appeals10 B.T.A. 920; 1928 BTA LEXIS 3999; February 21, 1928, Promulgated *3999  Where petitioners' decedent, on a cash receipts and disbursements basis, received in January, 1922, and in January, 1923, certain amounts for services rendered to a corporation in 1921 and 1922, respectively, it is held that the amount so received in 1922 and 1923 constitutes income for the year in which actually received.  Basil Robillard, Esq., for the petitioners.  Bruce A. Low, Esq., for the respondent.  LOVE *921  The Commissioner determined a deficiency of $1,720.73 in income tax for the calendar year 1921, and a deficiency of $135.73 for the calendar year 1922.  The petitioners contend that each deficiency was incorrectly determined, due to the fact that the Commissioner erroneously included in their decedent's income for 1921 an amount which was not received until 1922 and, likewise, erroneously included in their decedent's 1922 income an amount which was not received until 1923.  FINDINGS OF FACT.  The petitioners' decedent was, during the years in question, an individual residing at Niagara Falls, N.Y.  He kept his accounts and reported his income on a cash receipts and disbursements basis.  During the taxable years, he was a*4000  director, stockholder, and legal counsel of and for the Frontier Finance Corporation with which he had an arrangement whereby he was to receive for services rendered to it a percentage of its net profits for each calendar year.  The corporation was engaged in buying and selling securities.  Its net profits for any year were not determined until the close of business on the last business day of such year, at which time an inventory was taken and during the first few days of the following year the computation of profits was made and payment made according to the arrangement or agreement.  On or about January 3 or January 4, 1922, petitioners' decedent received a check from the Frontier Finance Corporation, dated as of the year 1921 for $5,011.54, representing compensation for services rendered by him during 1921.  This check was signed by the manager and countersigned by the treasurer of the corporation in the year 1922.  The petitioners' decedent reported the amount of the check as a part of his 1922 income.  The respondent, in determining the deficiency for 1921, treated this sum as taxable income for that year.  On or about January 3, or January 4, 1923, petitioners' decedent*4001  received a check from the Frontier Finance Corporation, dated as of the year 1922 for $5,601.72, representing compensation for services rendered by him during the year 1922.  This check was signed by the manager and countersigned by the treasurer of the corporation in the year 1923.  The decedent reported the amount of the check as part of his 1923 income.  The respondent in determining the deficiency for 1922 treated this sum as taxable income for that year.  These checks for the amounts, the treatment of which is in dispute, were delivered to decedent by the manager of the corporation.  The decedent and the corporation had offices in the same building but on different floors.  *922  OPINION.  LOVE: Practically the identical facts, except as to parties, were considered by the Board, and the same issue, as presented herein, was decided favorably to the petitioner in . Accordingly, the action taken by the Commissioner with respect to the amounts reported by decedent as income for the years 1922 and 1923, respectively, is reversed.  Inasmuch as we do not have before us the Commissioner's computations, we are unable to determine*4002  whether the entire deficiency as to each year results from his action with respect to which error was alleged.  Judgment will be entered for the petitioners on 15 days' notice, under Rule 50.