The opinion
Appeal of WOOLF & REYNOLDS, INC.
Woolf & Reynolds, Inc. v. Commissioner
Docket No. 1786.
United States Board of Tax Appeals
1 B.T.A. 1092 ; 1925 BTA LEXIS 2665 ;
May 5, 1925 , decided Submitted March 31, 1925 .
*2665 Albert L. Clothier, Esq., for the taxpayer.
Ellis W. Manning, Esq., for the Commissioner.
Before STERNHAGEN, TRAMMELL, and PHILLIPS.
The taxpayer appealed from a deficiency determined by the Commissioner of $2,214.31 in income and profits taxes for the taxable period from February 1, 1918, to December 31, 1918. The bases of the appeal are, (1) that the Commissioner erred in not allowing as ordinary and necessary expenses contributions to various war funds, hospitals, and charities; and (2) that the taxpayer is entitled to special assessment under the provisions of sections 327 and 328 of the Revenue Act of 1918. No evidence was offered on the lastmentioned issue.
FINDINGS OF FACT.
The taxpayer is a Pennsylvania corporation organized in 1903, and has its principal office at Johnstown, Pa., where it conducts a retail clothing business. Johnstown, in 1918, had a population of approximately 50,000.
During the taxable period, the corporation made contributions to the organizations and in the amounts shown below: United war works fund $1,000.00
Red Cross 500.00
Y.M.C.A. war fund 300.00
K. of C. war fund 100.00
Mercy Hospital 200.00
Johnstown City Hospital 50.00
Salvation Army 5.00
Associated Charities 75.00
Miscellaneous 24.18
2,254.18
*2666 The five principal stockholders talked over the subject and it was thought the business of the corporation would be benefited. They had no particular accounts in mind, but wished to retain the good will of the public.
DECISION.
The determination of the Commissioner is approved. The contributions are not "ordinary and necessary" expenses paid in carrying on the business, within the meaning of section 234(a)(1) of the Revenue Act of 1918.