Items related to A story of the income tax; an aid to the application...
A story of the income tax; an aid to the application of the 1919 revenue act, February 1919 - Softcover
Synopsis
This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1919 Excerpt: ... is rendered, the amounts so paid are not deductible. (Treasury Decision No. 2152, February 12, 1915.) This office is in receipt of your letter of the 19th instant, in which you ask a ruling of this office as to how payments made under the bonus system or profit-sharing plans may be treated by corporations in making their returns of annual net income. This office has consistently held and still holds that in cases where these increased compensations, denominated as bonuses or profit sharings, are paid to the employes pursuant to a contract as between the employes and the corporation, the amounts so paid will be considered an ordinary and necessary expense of operation of business, and as such will constitute an allowable deduction from gross income of the corporation making such payments. If, however, there is no contractual relation between the employe and the employer by reason of which the employe could enforce his claim for the additional compensation, it is held that these payments are gratuities on the part of the corporation and as such are not allowable deductions from gross income. (Letter to the Alexander Hamilton Institute, signed by Acting Commissioner Robert Williams, Jr., and dated June 25, 1914.) In order to establish uniformity and to facilitate the work of internal revenue officers who are engaged in the examination of books for the verification of the returns of annual net income made pursuant to the requirements of the Federal income tax law, you are informed that in all cases wherein special payments, often designated as bonuses, are made to officers or employes of corporations pursuant to a contract, express or implied, as additional compensation for services rendered, which payments, when added to the stipulated salaries, do not exceed...
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