Appeal of Lawrence Elmer Burton

Appeal of Lawrence Elmer Burton. Docket No. 2689. Decided October 19, 1926. James Bherier, Esg., for the petitioner. F. 0. Graves, Esg., for the Commissioner. [MAJORITY — Sternhagen:] Sternhagen: Deficiency of $201.92 income tax for 1922, resulting from the Commissioner’s disallowance of petitioner’s deduction of necessary business expenses. BINDINGS OF FACT. Petitioner is a United States citizen, and in 1922 be was employed by H. K. Mulford Co. as salesman in Straits Settlement, Java, Borneo, French Indo China, Siam and Malay States. His employment was under a written contract providing a salary of $200 a month and “necessary approved traveling expenses.” For all sales in excess of $50,000 net per year he was to receive “ a bonus of 5 per cent on such excess providing however that the total amount of his selling cost including salary and expenses shall not exceed 12½ per cent of the total amount of sales.” In 1922 he did not mate sufficient sales to entitle him to a bonus and he received no bonus. He traveled much of the time, and rendered itemized expense accounts to the company upon which the company paid him $4,099.55 as expenses, in addition to the salary of $2,400, a total of $6,499.55. Petitioner included this entire amount in gross income and deducted the amount of expenses. Judgment will T)e entered for the petitioner.