This is an appeal from an alleged deficiency in income and profits taxes for the year 1920 in an amount less than $10,000. The deficiency arises from the Commissioner’s refusal to accord the taxpayer classification as a personal service corporation. From the pleadings and from depositions filed by the taxpayer the Board makes the following
FINDINGS OE FACT.
The taxpayer is an Ohio corporation with its principal place of business at Akron.
During 1919 boom conditions in the trade resulted in the construction of rubber factories in many sections of the country. Firms located or represented at Akron and engaged in the manufacture, sale, and installation of machinery and equipment used in the rubber industry were receiving inquiries relative to the construction of rubber products factories. This condition resulted in the organization of the taxpayer, which specialized in designing and supervising the construction of rubber factories. While the stock of the taxpayer stood in the names of individuals, it was in reality, in many instances, the property of the firms employing them.
The firms and individuals holding stock in the Akron Engineering Co. would encourage inquirers to employ the company to design and supervise the construction and equipment of factories, and the *147company would encourage the installation of machinery and equipment manufactured or handled by those firms or persons.
The stock of the taxpayer stood in the names of 12 persons. In five instances this stock was held by an individual for another corporation. Four of the stockholders devoted their entire time to the company’s affairs and three of them were salaried officers. Two other stockholders devoted their entire time to the company for certain periods of the year, one being so employed for three months and another for eight months. The remaining six stockholders procured such business as they could for the taxpayer and held consultations with its officers relative to the taxpayer’s business and to other matters.
The.record does not show the percentages of stock ownership, nor the total outstanding stock.
The taxpayer’s pay roll during 1920 aggregated $33,131.95, of which $18,122.89 was paid stockholding employees and officers, and $15,011.06 was paid 22 nonstockholding employees.
DECISION.
The determination of the Commissioner is approved.