National Brass Works, Inc. v. Commissioner of Internal Revenue

Petitioner, National Brass Works, Inc., asks us to review a decision of the Tax Court in deficiency redetermination proceedings. The Tax Court found that the Commissioner of Internal Revenue’s determination of a deficiency in petitioner’s corporate income tax for the year 1944 was correct.

The controversy is over the allowability of a business expense claimed by petitioner under Section 23(a) (1) (A), Internal Revenue Code, 26 U.S.C.A. § 23 (a) (1) (A). Petitioner is engaged in the business of making and selling non-ferrous castings and had deducted from its 1944 gross income as a business expense an amount paid to the government in compromise of admitted violations of certain maximum price regulations promulgated by the Office of Price Administration which established certain maximum selling prices for non-ferrous foundry products. Respondent disallowed the deduction and assessed the disputed deficiency.

The case was submitted to the Tax Court on stipulated facts. In short, after examination of its books by O.P.A. investigators, petitioner admitted that between February 1, 1943, the effective date of such price regulations, and January 31, 1944, it made sales of castings at…