Becker Bros. v. United States’s Empirical Analysis
7 F.2d 3 · 1925
Citation profile
17 federal appellate · 3 district · 1 state decisions
How this case has been cited
Cited by 26 later decisions (1 by the Supreme Court) — most recently February 2021 · most notably Botany Worsted Mills v. United States (1929), Campbell v. American Foreign S. S. Corp. (1941)
17 federal appellate · 3 district · 1 state decisions
Later decisions citing this case, by decade. The current decade is in progress, and our corpus holds fewer opinions from the most recent years, so the latest bars are undercounted — not a real decline.
Relationships
Relies on Kennon v. Gilmer · Arkansas Val Land Cattle Co v. Mann · Washington & Georgetown Railroad v. Harmon's Administrator · Hopkins v. Orr · The President Directors and Company of the Bank of the Commonwealth of Kentucky v. John Ashley and John Ella
Most-quoted passages
The sentences later courts lift from this opinion, ranked by how many decisions quote each — the parts of the opinion doing the work. These counts are smaller than the citation total above because most of the 26 citing decisions cite the case generally; a passage count includes only decisions quoting that exact language verbatim.
“There can be no doubt that the corporation was entitled to deduct from the income it received all the ordinary and necessary expenses incurred in carrying on its business, including a reasonable compensation to its officers and employees. But the salaries which are paid in order to constitute an allowable deduction must be a reasonable and fair compensation for the services rendered. The expenses which can be deducted are the `ordinary and necessary expenses.' If a corporation sees fit to pay its employees extraordinary, unusual, and extravagant salaries, distributing the profits of the business in the guise of salaries to its officers, who hold the stock and control its affairs, such salaries manifestly do not constitute the `ordinary and necessary expenses' of the business, which can be deducted under the statute. The government is not bound or concluded either by any resolution which the corporation adopts, or by its method of keeping its books, upon the question as to whether any particular payment is a salary payment or a division of surplus.”
1 later decision quote this exact passage“As the board of directors is charged with the duty and clothed with the discretion of fixing the salaries of the corporation's officers, the Government has no right (until expressly granted by statute) to inquire into and determine whether the amounts thereof are proper, that is, whether they are too much or too little. But, while the amount of salary fixed by a board of directors is presumptively valid, it is not conclusively so, because the Government may inquire whether the amount paid is salary or something else. Admittedly the Government has a right to collect taxes on net income of a corporation based on profits after all ordinary and necessary expenses, including salaries, are paid. It has a right, therefore, to attack the action of a board of directors and show by evidence, not that a given salary is too much, but that, in the circumstances, the whole or some part of it is not salary at all but is profits diverted to a stockholding officer under the guise of salary and as such is subject to taxation.”
1 later decision quote this exact passage“the ordinary and necessary expenses paid within the year in the maintenance and operation of its business and properties.”
1 later decision quote this exact passage
How this case has been treated — in progress
Whether each later court followed, distinguished, criticized, or overruled this decision. The treatment classification (task #35) runs highest-cited cases first and lights up here as it reaches this one.