Revere Racing Association v. Scanlon, 5096.
| Decision Date | 09 May 1956 |
| Docket Number | No. 5096.,5096. |
| Citation | 232 F.2d 816 |
| Parties | REVERE RACING ASSOCIATION, Inc., Plaintiff, Appellant, v. Thomas E. SCANLON, District Director of Internal Revenue, Defendant, Appellee. |
| Court | U.S. Court of Appeals — First Circuit |
Louis L. Lobel, Boston, Mass., with whom James N. Gabriel, Boston, Mass., was on the brief, for appellant.
David O. Walter, Atty., Dept. of Justice, Washington, D. C., with whom Charles K. Rice, Acting Asst. Atty. Gen., Lee A. Jackson and I. Henry Kutz, Attys., Department of Justice, Washington, D. C., and Anthony Julian, U. S. Atty., and Arthur I. Weinberg, Asst. U. S. Atty., Boston, Mass., were on the brief, for appellee.
Before MAGRUDER, Chief Judge, and WOODBURY and HARTIGAN, Circuit Judges.
This case presents the question: Whether the taxpayer may recover an alleged overpayment of income taxes for the fiscal year ending April 30, 1951, wherein the taxpayer was denied a deduction of certain expenditures under § 23(a) (1) (A)1 of the Internal Revenue Code of 1939, 26 U.S.C.A., said expenditures having been made to persuade a majority of voters to vote in the affirmative on the question: "Shall the parimutuel system of betting on licensed dog races be permitted in this County?"
The district court ruled that the deductions claimed here were not ordinary and necessary expenses of doing business, and on November 15, 1955, entered a judgment dismissing the action. The plaintiff on the same date filed its notice of appeal.
The lower court's findings were based on a stipulation of facts which may be summarized as follows: The appellant is a Massachusetts corporation and conducts and operates a greyhound race track, under license granted by the Massachusetts State Racing Commission, in the City of Revere, Suffolk County, Massachusetts. The appellee was the duly authorized and incumbent United States District Director of Internal Revenue for the District of Massachusetts. The appellant duly filed its federal income tax return for the fiscal year ending April 30, 1951, wherein it included a deduction from its gross income of $23,148.51 for certain promotional advertising, public relations and legal fees. On or about May 7, 1953, an examination was completed by a duly qualified Revenue Agent of the appellant's Federal Income Tax Return for the fiscal year ending April 30, 1951, as a result of which said District Director determined inter alia, that the said amount was not an allowable deduction from the appellant's gross income under Section 29.23(q).1, United States Treasury Regulations 111. The appellant paid the assessed deficiency, plus interest, under protest, in the total amount of $15,101.19 and then duly filed a claim for refund and subsequently brought suit in the United States District Court after the rejection of its claim for refund by the said District Director. The amount of the claim for refund is $10,241.12 (or such greater amount as is legally refundable).
The pari-mutuel system of betting on licensed dog races in the Commonwealth of Massachusetts was authorized by the Acts of 1934, Chapter 374, § 3, by creating General Laws (Ter.Ed.) Chapter 128A. This act, besides legalizing licensed dog racing, further provides by Section 14 thereof, that the question, "Shall the pari-mutuel system of betting on licensed dog races be permitted in this county?" shall be placed before the voters of each county at the biennial State election for the year 1934 and shall not be submitted under this section to the voters of any county oftener than once in four years. A majority vote in answer to said question in the affirmative in any county was taken to authorize the granting of a license by the State Racing Commission, provided the applicant otherwise qualifies for such license.
Chapter 138 § 2, of the Massachusetts Acts of 1947, amended Massachusetts General Laws (Ter.Ed.), Chapter 128A, § 14, by providing that the question, "Shall the pari-mutuel system of betting on licensed dog races be permitted in this county?" shall be placed before the voters of the several counties at the biennial State election in the year 1950 and in every fourth year thereafter and that an affirmative vote of a majority of voters in said counties shall be taken to have authorized the licensing of dog races in that county. This law was in effect in the years 1950-1951.
The question concerning licensed dog racing appeared on the official ballot in every city and town in every county in Massachusetts at intervals of four years starting in 1934 and whether the counties voted in the affirmative or negative, the question reappeared the following fourth year and will appear on the official ballot to be used every succeeding fourth year.
The appellant expended the sum of $23,148.51 to help aid and persuade a majority of the voters in Suffolk County to vote in the affirmative on the previously stated question which appeared as "6B" on the official ballot used in the cities and towns at the biennial state election in the year 1950.
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Cammarano v. United States Strauss Son, Inc v. Commissioner of Internal Revenue
...these Regulations to expenditures for publicity directed to the general public on legislative matters. See e.g., Revere Racing Ass'n v. Scanlon, 1 Cir., 232 F.2d 816; American Hardware & Equipment Co. v. Commissioner of Internal Revenue, 4 Cir., 202 F.2d 126; Roberts Dairy Co. v. Commission......
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...Co. v. Commissioner of Internal Rev., 9 Cir., 84 F.2d 453; Cammarano v. United States, 9 Cir., 246 F.2d 751; Revere Racing Association v. Scanlon, 1 Cir., 232 F.2d 816; American Hardware & Equipment Co. v. Commissioner of Internal Rev., 4 Cir., 202 F.2d Taxpayer is a corporation organized f......
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Cammarano v. United States
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