
    William C. Raue & Sons Co., Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 8272.
    Promulgated January 16, 1928.
    
      Joseph J. Raue, Esq., for the petitioner.
    
      A. LeRoy Deveney, Esq., for the respondent.
   OPINION.

Phillips:

The petitioner claims that the salaries paid were merely nominal in amount, that a larger amount would have been paid before the close of the year, except for the sickness of the officer having charge of the accounts, and that it should be entitled to a further deduction for salaries in the amount of $1,550.

Section 234(a) (1) of the Revenue Act of 1918 provides that in computing the net income of a corporation there shall be allowed as a deduction 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 impersonal services actually rendered.

There is no evidence that any amount for salaries was paid or incurred by petitioner during the year 1920, except the amount of $4,050, which was paid to its three officers by petitioner during the year 1920 and which was allowed as a deduction by the Commissioner. The Board has consistently held that salaries, like all other expenses, must be paid or incurred in the taxable year in which they are claimed as deductions. We conclude that the Act does not permit of any further deduction for the year 1920 on account of salaries than has been allowed by the Commissioner.

Decision will be entered for the respondent.  