Whitney Coal Mining Co. v. Commissioner

*312OPINION.

Smith:

The taxpayer paid to its officers during the year 1919 $5,400. In March, 1919, the taxpayer had agreed to pay its officers salaries of $35,400. By reason of the fact that it did not earn enough to pay the full amount of salaries, there was an agreement among the officers that the full amount should not be paid. The evidence is not clear as to whether this agreement resulted in a relinquishment on the part of the officers of the undrawn salaries, or whether there was merely an agreement that the payment of them should be deferred. The income-tax return of the corporation, made out by the bookkeeper but executed by the president, and secretary and treasurer, shows the deduction from gross income of only $5,400 for salaries of officers. Although the taxpayer earned a large amount of money in 1920, no back salaries were paid to the officers and no back salaries have been paid, up to the present time. In view of this fact, *313the Board is of the opinion that the amount of officers’ salaries which was an expense to the corporation in 1919 was only $5,400.

Order of redetermination will be entered on 15 days’ notice, under Rule 50.