Court Opinion

ID: 4490880
Source: CourtListenerOpinion
Date Created: 2020-01-17 22:02:35.122345+00
Date Added: 2024-06-11T15:03:23.096002
License: Public Domain

*765OPINION.
Ivins:
The Commissioner’s answer contains a plea in bar of the Board’s jurisdiction in so far as the appeal relates to the years 1918, 1919, and 1921, because overassessments were found for those years. The plea is overruled on authority of the Board’s decisions in the Appeal of E. J. Barry, 1 B. T. A. 156; and Appeal of Hickory Spinning Co., 1 B. T. A. 409
The taxpayer alleges three errors of the Commissioner, being (1) the inclusion in taxable income of certain items of accrued interest on notes receivable, which notes the taxpayer asserts represent payment for capital stock; (2) the exclusion from invested capital of the par value of the capital stock for which the said notes were given because the stock is held not to be “paid in”; and (3) the inclusion in taxable income of items of accrued interest on alleged “withdrawals” by stockholders although such withdrawals were held to be dividends.
The Commissioner’s answer conceded that in the event the taxpayer admitted that the withdrawals were dividends, or that the Board found that they were in fact dividends, the interest accrued thereon was not income. The taxpayer conceded that the withdrawals were dividends taxable to the stockholders, and it follows that no interest should have been accrued by the corporation on account of them. Therefore, the net income found by the Commissioner should be reduced by the amount of such accruals.
For lack of any competent evidence with respect to the other points in the petition, we are. constrained to affirm the determination of the Commissioner thereupon.
Arundell not participating.