Court Opinion

ID: 9842807
Source: CourtListenerOpinion
Date Created: 2023-09-24 02:19:01.341358+00
Date Added: 2024-06-11T09:13:53.786763
License: Public Domain

FINNEGAN, Circuit Judge
(dissenting).
Book-making is a statutory criminal offense in Illinois. Ill.Rev.Stat.1955, chap. 38, § 336. It is undisputed that appellee Charles Y. Dojil'e operated “a bookmaking establishment” in that State for the tax years involved. Shortly stated the question is, can Doyle’s disbursements for salaries , and rents incurred in his illegal enterprise be classed “ordinary and necessary” under § 23(a) (1), Internal ReVenue Code of 1939. Under the. Illinois' statute Doyle’s *639expense items are unnecessary, though perhaps ordinary. But for deductibility as business expenses in computing federal income taxes, the Congressional mandate requires both elements — ordinary and necessary. I am unable to ignore the public policy of Illinois manifested by its statute proscribing the behavior generating Doyle’s items of rent and salaries. The “temerity to raise” such deductibility was long ago anticipated in another case. United States v. Sullivan, 1927, 274 U.S. 259, 264, 47 S.Ct. 607, 71 L.Ed. 1037. I would reverse the Tax Court decision and remand this case with directions to disallow the deductions claimed.