Harold Hitz Burton

“ Deductions from gross income.↑ 'To construe the law as giving to the Commissioner the power to assess a taxpayer with a deficiency tax greatly in excess of what he owes and to hold that such law denies to the taxpayer the right to contest such assessment, except at his own personal expense, just isn't justice under the law. ”

“ Indeed, the burden of legal expense is likely to be in inverse proportion to the amount of the deficiency asserted. Here the expense was only about 5% of the saving. In small cases of small taxpayers the percentage will be far greater and in many may exceed 100%. Certainly contest against unwarranted exaction, regardless of its amount or outcome, is for the conservation of property and its reasonable cost is dedictible. ”

“ Similarly, there is no substantial factual basis here for treating the stock transfers and the related attorney's fee as mere incidents of petitioner's 'management, conservation, or maintenance of property held for the production of income.' Even assuming that petitioner's 3,000 shares in Lakes Brothers, Inc., did constitute property originally held by him for the production of income, there is no finding, and no adequate basis for a finding, that his donation of one-third of that stock actually was not the gift he represented it to be. ”

“ It is hard to imagine any instance in which the Treasury could have a stronger self-interest in its regulation. I cannot put my finger on a case where we have said that this reason would avoid Treasury Regulations. ”

“ Petitioner does not claim that the gift itself is deductible and, if it, as the principal item in the transaction is not deductible, we find no adequate basis in this record for holding the related attorney's fee deductible.
II. Legal expenses do not become deductible merely because they are paid for services which relieve a taxpayer of liability. ”

“ Section 24 adds that in 'computing net income no deduction shall in any case be allowed in respect of- (1) Personal, living, or family expenses * * *.' 53 Stat. 16, 56 Stat. 826, 26 U.S.C. § 24 (a) (1) , 26 U.S.C.A. § 24 (a) (1) . Insofar as gifts to members of a donor's family are in the nature of personal or family expenses, the donor's expenditures for accounting, legal or other services incurred in making those gifts are of a like nature. ”