Memorandum Opinion
ARUNDELL, Judge: This proceeding was initiated to test the correctness of respondent's determination of a deficiency in income tax in the amount of $227.91 for the calendar year 1941. The respondent has included in petitioner's income the sum of $1,900 which the latter claims was a gift to him.
The evidence establishes that petitioner George D. Moore, hereinafter referred to as petitioner, was employed by the Standard Surety and Casualty Company of New York, hereinafter called company, for the period from December 1928 to October 1941. During all this time petitioner was comptroller of the company and in that capacity he had charge of the financial statements, made the tax returns, had charge of statistical matters and supervised the office, etc. Petitioner's salary during the latter part of his employment was approximately $5,000 per year. He was neither a stockholder nor a director of the company.
Sometime in or about October 1941, the stock of the company was purchased by one of the Aetna group and a new board of directors was chosen and the1944 Tax Ct. Memo LEXIS 202">*203 management changed. At that time petitioner ceased to be connected with the company. Incident to this change petitioner and various officers and employees of the company were given what may be termed severance pay and the sum paid to petitioner on this occasion was $1,900. This sum was not intended as a gift but as a reward for past faithful services and in lieu of notice incident to the severance of employment. The company treated the sum paid petitioner, as well as similar items, as salary and took credit for it in its income tax returns.
On this evidence the Division hearing this cause expressed the view from the bench that the sum of $1,900 received by petitioner in the taxable year constituted salary and not a gift and as such was properly includible in his taxable income for the year 1941. The respondent is sustained.
Petitioner filed his returns with the Collector of Internal Revenue at Newark, New Jersey.
