Union Inv. Co. v. Commissioner

Withey, J., dissenting: Deductions from gross income are not a matter of right but are a matter of legislative grace and a taxpayer claiming a deduction must bring himself squarely within the terms of a statute granting it. New Colonial Ice Co. v. Helvering, 292 U. S. 435 , affirming 24 B. T. A. 886. Deductions for expenditures incurred for lobbying activities and for the promotion or defeat of legislation are outside the statutory grant relied on by the petitioner. Textile Mills Securities Corp. v. Commissioner, 314 U. S. 326 . Where, as here, the taxpayer acting through its vice president makes an expenditure not shown to have been for other than lobbying activities or for the promotion or defeat of legislation and as a result incurs an additional expenditure for the defense of the vice president, the latter expenditure is so directly related to the former as to partake of its character. In the absence of a showing as to what the character of the former expenditure was, I would sustain the respondent in disallowing the latter.

Raum, J., agrees with this dissent.