United States of America, Appellant, v. Safety Engineering and Supply Company, Inc., Appellee, 374 F.2d 885 (5th Cir. 1967)

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US Court of Appeals for the Fifth Circuit - 374 F.2d 885 (5th Cir. 1967) March 23, 1967

Macon L. Weaver, U. S. Atty., Birmingham, Ala., Richard M. Roberts, Acting Asst. Atty. Gen., Lee A. Jackson, Harry Marselli, Meyer Rothwacks, Albert J. Beveridge, III, Attys., Dept. of Justice, Mitchell Rogovin, Asst. Atty. Gen., Washington, D. C., for appellant.

Thomas A. Ritchie, Birmingham, Ala., for appellee.

Before BROWN, MOORE,*  and BELL, Circuit Judges.


The Government appeals from a judgment entered by the District Court after an adequate evidentiary hearing holding that the compensation, including the disputed bonus paid to each of two principal stockholder-officer-employees was reasonable, did not constitute constructive dividends and was therefore properly deductible by the corporate Taxpayer. 26 U.S.C.A. § 162; Treas.Reg. § 1.162-7 (b) (1) and (3) (1954).

We find the appeal and record wholly without any redeeming merit, but since we have expended the travail for submission, we dispose of it on its merits or, more accurately, the lack of them, rather than dismiss as frivolous.



Of the Second Circuit, sitting by designation