TAXATION - INCOME TAX - DEDUCTIONS - ORDINARY AND NECESSARY BUSINESS EXPENSES - COMMISSIONS PAID TO SENATOR FOR SECURING PUBLIC CONTRACTS

Taxpayer, a gravel company, employed as salesman a state senator, who obtained several contracts with the State Highway Commission of Louisiana. The Board, of Tax Appeals disallowed deductions for the commissions paid therefor, on the ground that the payments were for using personal influence with a governmental department, pursuant to a contract which is contrary to public policy. Held, in absence of evidence that the state senator agreed to or attempted to use any personal or political influence, the commissions paid to him are deductible business expenses. Alexandria Gravel Go., Inc. v. Commissioner of Internal Revenue, (C. C. A. 5th, 1938) 95 F. (2d) 615, reversing 35 B. T. A. 323 (1937), one judge dissenting.