Monday, April 29, 2013

Old Colony Trust Co. v. Commissioner case brief

Old Colony Trust Co. v. Commissioner case brief
279 U.S. 716, 49 S. Ct. 499,73 L. Ed. 918, 1929 U.S.

CASE SYNOPSIS: Petitioner corporation challenged the decision of the U.S. Circuit Court of Appeals for the First Circuit, which held that payment by the employer of the income taxes assessable against the employee constituted additional taxable income to such employee. Respondent, the Commissioner of Internal Revenue, assessed a deficiency against the employees.

FACTS: Petitioner paid the federal income taxed owed on salaries for some of its executives. The Commissioner assessed a deficiency against the employees, arguing that petitioner's payment of their taxes constituted additional salaries, which was taxable.

The Court first determined that the Circuit Court and itself had jurisdiction over appeals from the tax appeals board, finding that there was a live case or controversy. The Court also determined that, by petitioner paying its executives' income taxes, that in itself was a form of taxable compensation, whereupon additional tax was due. The Court upheld respondent's deficiency determination and ordered that additional taxes must be paid.

CONCLUSION: The Court affirmed the appellate court's judgment.
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