Saturday, May 4, 2013

Higgins v. Commissioner case brief

Higgins v. Commissioner case brief
312 U.S. 212, 61 S. Ct. 475, 85 L. Ed. 783, 1941 U.S.

CASE SYNOPSIS: Petitioner taxpayer sought certiorari review of a judgment from the Circuit Court of Appeals for the Second Circuit, which affirmed a ruling that sustained a decision from respondent Commissioner of Revenue refusing to allow as deductions, under § 23(a) of the Revenue Act of 1932, 47 Stat. 169, petitioner's salaries and expenses incident to looking after his own investments.

FACTS: Petitioner sought review of judgment that sustained respondent's refusal to allow as deductions, under § 23(a) of the Revenue Act of 1932, 47 Stat. 169, petitioner's salaries and expenses incident to looking after his own investments. On certiorari, the United States Supreme Court affirmed. The Court noted that there existed no regulation that interpreted the meaning of "carrying on a business," as the terms were used in § 23(a), nor were there any rulings approved by the Secretary of the Treasury concerning the matter. Further, the Court held that the rulings cited by petitioner in support of his view that such salaries and expenses were deductible were determinative of the issue. Noting that whether the activities of a taxpayer were "carrying on a business" required an examination of the facts in each case, the Court ruled that respondent's decision that petitioner's evidence insufficient to establish petitioner's activities as those of carrying on a business was adequately supported by the record.

CONCLUSION: The Court affirmed a judgment that sustained respondent's disallowance, as deductions, of petitioner's salaries and expenses incident to looking after his own investments because respondent's decision, as affirmed by the Board of Tax Appeals, that appraised petitioner's evidence as insufficient to establish petitioner's activities as those of carrying on a business, was adequately supported by the record.

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