The opinion
*482 OPINION.
Marquette:
Considering the evidence presented relative to the $5,000 item which the Commissioner has included in the taxpayer’s 1919 income after denying its validity as a 1918 accrual and deduction, we are unable to ascertain any sound basis for disturbing the Commissioner’s determination on that point.
The fact that William F. Schaeffler, reporting on the cash basis, reported as salary received from the taxpayer during 1918 the exact amount which the taxpayer on the accrual basis deducted as salary accrued to him during the year is strongly indicative of the fact that no salary could have been accrued to him at December 31, 1918. There has been no showing that the sum involved was accrued to the taxpayer’s other officers and no effort to present evidence of their salaries as reported individually.
This conclusion is further influenced by the fact that the deduction claimed for officers’ salaries during 1Q19 is so much greater than similar claims for prior and subsequent years as to lend color to the Commissioner’s contention that it included the $5,000 item now under discussion, thus indicating that it was taken as a 1919 deduction.
The taxpayer contends that regular salary and extra salary or bonus payments made its stockholding officers and employees.during the years involved were determined solely on the merits of each recipient, i. e., on his worth to the business. We are not persuaded, *483 however, that the taxpayer’s determination oí the worth to it of each of the recipients was not influenced, if indeed not controlled, by a consideration of his stock interest and in the case of William F. Schaeffler the combined interests of himself and his wife.
It would indeed be a most peculiar coincidence if the relative worth of the services of the five men conducting this firm should, in each instance be exactly in proportion to his stock interest. In the absence of more detailed evidence than has here been presented we can not incline to the belief that such a condition actually prevailed.
We are therefore of opinion that the Commissioner’s treatment of the extra-salary deductions as dividends is correct.
Arundell not participating.