Lilly v. Commissioner
343 U.S. 90 (1952)

Annotate this Case

U.S. Supreme Court

Lilly v. Commissioner, 343 U.S. 90 (1952)

Lilly v. Commissioner

No. 158

Argued December 3, 1951

Decided March 10, 1952

343 U.S. 90

Syllabus

Petitioners were engaged in the optical business in North Carolina and Virginia in 1943 and 1944. Pursuant to agreements reflecting an established and widespread practice in that industry in those localities, they paid to the respective doctors who prescribed the eyeglasses which they sold one-third of the retail sales price received for the glasses.

Held:

1. Such payments were deductible by petitioners as "ordinary and necessary" business expenses under § 23(a)(1)(A) of the Internal Revenue Code. Pp. 343 U. S. 91-94.

2. Disallowance of the deductions on the ground that the payments violated or frustrated "public policy" was unwarranted, since, in 1943 and 1944, there was no governmentally declared public policy, national or state, proscribing such payments. Textile Mills Corp. v. Commissioner,314 U. S. 326, distinguished; Commissioner v. Heininger,320 U. S. 467, followed. Pp. 343 U. S. 94-97.

188 F.2d 269, reversed.

The Commissioner's determination of a deficiency in petitioners' income tax was sustained by the Tax Court. 14 T.C. 1066. The Court of Appeals affirmed. 188 F.2d 269. This Court granted certiorari. 342 U.S. 808. Reversed and remanded, p. 343 U. S. 98.

Page 343 U. S. 91

Official Supreme Court case law is only found in the print version of the United States Reports. Justia case law is provided for general informational purposes only, and may not reflect current legal developments, verdicts or settlements. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or information linked to from this site. Please check official sources.