Keitel v. Commissioner

SterNhageN,

concurring: There are several weaknesses in the petitioner’s case which clearly support the judgment for respondent, but I regard the prevailing opinion as unsound. In any event it is obiter and can not serve as a precedent.

The petition alleges and the answer admits that—

the partnership business was not a success and his mother’s income from the business being insufficient to meet her immediate needs, Elmer agreed to guarantee her an adequate income in the amount of $200 per month during life, if she would consent to a reorganization of the business that they might convert the partnership into a corporation.

In the absence of any other evidence to the contrary than is in this record, this stipulation indicates that some part or perhaps all *910of Elmer’s payments are “personal, living, or family expenses” which are among the items enumerated in section 215, Revenue Act of 1921, as not deductible. Gifts are also not among the statutory deductions.

Furthermore, the lack of evidence of actual payments or of a system of accounting justifying the deduction of items incurred, whether paid or not, deprives the issue of any factual basis and requires a judgment for respondent, notwithstanding the apparent willingness of counsel to argue the abstract question.

Smith, Teammell, Moekis, and Murdock agree with this opinion.