Tonopah & T. R. Co. v. Commissioner of Internal Revenue

Petitioner, a New Jersey corporation, hereafter called “Tonopah”, seeks review of a decision of the Board of Tax Appeals holding it liable for failing to withhold from interest paid in London in the tax year 1936, to certain alien holders of petitioner’s bonds the percentage of interest due required by §§ 143(b) and 144 of the Revenue Act of 1936, 26 U.S.C.A. Int.Rev. Acts, pages 887, 888.

Tonopah contends that the interest moneys paid in London to the alien bondholders was interest money of which it did not have “control, receipt, custody, disposal or payment” within the provision of § 143(b) which provides: “All persons, in whatever capacity acting, including lessees or mortgagors of real or personal property, fiduciaries, employers, and all officers and employees of the United States, having the ' control, receipt, custody, disposal, or pay- • ment of interest * * * -(but only to the extent that any of the above items constitutes gross income from sources within the United States), of any nonresident alien individual, * * * shall * * * deduct and withhold from such annual or periodical gains, profits, and income a tax equal to 10 per centum thereof * *

Tonopah contends that…