Opinion
No. 9.
November 5, 1942.
On Petition to Review an Order of the Tax Court of the United States.
Petition by L. C. Mayers Co., Inc., against the Commissioner of Internal Revenue to review an order of the Tax Court of United States assessing a deficiency against the petitioner in its income tax for the years ending June 30, 1937, and June 30, 1938.
Order affirmed.
Andrew B. Trudgian, of New York City, for petitioner.
Maryhelen Wigle, Sp. Asst. to Atty. Gen., Samuel O. Clark, Jr., Asst. Atty. Gen., Sewall Key, and Gerald L. Wallace, Sp. Assts. to the Atty. Gen., for respondent.
Before L. HAND, CHASE, and FRANK, Circuit Judges.
The single issue is whether the Tax Court shall be affirmed in refusing to disturb a ruling of the Commissioner, reducing the allowance for salaries of the taxpayer's president and secretary-treasurer from $30,000 apiece to $20,000. We do not think it necessary to state the details of the business, for it is clear that such reductions as these are beyond the reach of our review and possibly even of that of the Tax Court. We do not indeed mean that we could not review any cut, however drastic; if the Commissioner had, for example, allowed no more than $2,400 we might well have been obliged to reverse the order affirming his ruling. But until it is apparent that the allowance exceeds any possibly reasonable limits, we should not intervene; at least not unless there is evidence of a current rate in closely similar businesses, such as practically is seldom, if ever, available. It is true that in the case at bar the taxpayer made an effort to prove what were the usual salaries in similar businesses but the testimony was not so compelling that the Tax Court was bound to accept it.
Order affirmed.