Brief Fact Summary. Petitioner, Vander Poel, Francis & Co., Inc., deducted the salaries paid to two of its officers, Vander Poel and Francis. However, the entire amount of their salary was not actually paid in the year it was deducted by Petitioners. The Commissioner did not allow the full deduction.
Synopsis of Rule of Law. The doctrine of constructive receipt does not parallel the doctrine of constructive payment.
Issue. Whether Petitioner is entitled to deduct the full amount of its two officers’ salaries even though the full amount was not paid in the tax year?
Held. The Tax Court affirmed the Commissioner and held that the full amount may not be deducted.
Discussion. The Tax Court found that there was no actual payment in the year it was deducted and it should not be counted as such. Even though there may be constructive receipt, it does not follow that their was constructive payment for tax purposes.