The opinion
*778 OPINION.
Love
: The controversy arises over the refusal of the Commissioner to allow the items set forth in our findings of fact as deductions for *779 ordinary and necessary business expenses, under section 284 (a) (1) of the Revenue Act of 1918, which provides:
That in computing the net income of a corporation subject to the tax imposed by section 230 there shall be allowed as deductions:
(1) All the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including a reasonable allowance for salaries or other compensation for personal services actually rendered, ⅞ * ⅝.
It has been evidenced that the Commissioner has allowed all deductions claimed where the recipient was known to have received the money expended. The taxpayer paid its bills and obligations by check, in which the recipient was named as payee, except in the transactions in controversy. In these transactions checks totaling $12,075 were issued to the president or secretary of the taxpayer as payee, and so far as the books of the taxpayer were concerned these officers were the recipients of the money. The taxpayer now claims these amounts were given in cash to the president, Lee, who disbursed it to persons unnamed in order to facilitate the obtaining of public contracts.
The divulging of the names is not sought by the Commissioner or the Board simply to gratify curiosity or to solve a mystery, but to properly authenticate the expenditures. By not furnishing sufficient evidence of the alleged expenditures, the taxpayer has failed in its proof of ordinary and necessary business expense; also, as is pointed out, the Commissioner is unable to check up or compute the income of the unknown persons alleged to have received this money, as the taxpayer has failed to comply with section 256 of the Revenue Act of 1918, the pertinent parts of which provide:
That all individuals, corporations, and partnerships, in whatever capacity acting, including lessees or mortgagors of real or personal property, fiduciaries, and employers, making payment to another individual, corporation, or partnership, of interest, rent, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable gains, profits, and income (other than payments described in sections 254 and 255), of $1,000 or more in any taxable year, or, in the case of such payments made by the United States, the officers or employees of the United States having information as to such payments and required to make returns in regard thereto by the regulations hereinafter provided for, shall render a true and accurate return to the Commissioner, under such regulations and in such form and manner and to such extent as may be prescribed.by him with the approval of the Secretary, setting forth the amount of such gains, profits, and income, and the name and address of the recipient of such payment. (Italics ours.)
While it may be true that the taxpayer expended no money other than for strictly legal or legitimate purposes, the facts that the recipients were unwilling to have their names divulged, and that *780 the taxpayer declined and refused to divulge the names of the recipients or the specific amounts or purposes, bring the transactions under suspicion, which is strengthened by the fact that the alleged recipients feared that their standing and influence in their respective communities would be injured by a knowledge of their having received money under such conditions.
But, irrespective of any suspicion, and aside from any motive prompting taxpayer to withhold the specific information as to these payments, we need only to call attention to the inconsistent position of the taxpayer in invoking a section of a statute in its own behalf to sustain a claim for a deduction, while at the same instant he ignores another section of the same title of the same Act, and even at the moment of invoking the one he declines to comply with the other. As was aptly said by Mr. Justice Holmes in Rock Island, Arkansas & Louisiana R. R. Co. v. United States, 254 U. S. 141, 143 , “Men must turn square corners when they deal with the Government.”