Lauriston Inv. Co. v. Commissioner of Internal Revenue

This case involves income tax for 1929 in the amount of $1,090.59, and appellant seeks to review findings of the Board of Tax Appeals entered March 31, 1934. The findings are conclusive if sustained by any substantial evidence. Phillips v. Commissioner, 283 U.S. 589 , 51 S.Ct. 608 , 75 L.Ed. 1289 ; Helvering v. Rankin, 295 U.S. 123 , 55 S.Ct. 732 , 79 L.Ed. 1343 ; American Sav. Bank & Trust Co. v. Burnet (C.C.A.) 45 F. (2d) 548. The issue is whether the findings award was warranted that the debt deducted from the income tax return for 1929 was worthless that year or should, as the Board found, have been deducted prior to that time.

Section 23, Revenue Act of 1928, c. 852, 45 Stat. 791 , 799, 26 U.S.C.A. § 23 and note, Deductions for Gross Income, provides :

Treasury Regulations 74, promulgated under the Revenue Act of 1928, Art. 191, which have the force of law, 1 provides among other things:

“Where the surrounding circumstances indicate that a debt is worthless and un-collectible and that legal action to enforce payment would in all probability not result in the satisfaction of execution on a judgment, a showing of these facts will be sufficient evidence of the worthlessness…