The National Malleable Castings Co. filed a petition in error in the Common Pleas to reverse, vacate or modify the findings of the Tax Commission of Ohio under 5611-2 GC. On May 1, 1920, the Castings Co. filed with the County Auditor of Ohio its personal tax return as of Jan. 1, 1920. In this return defendant deducted the sum of $275,000 from the sum of legal claims and demands owing to it, said amount being the estimated amount of excess profits and income tax which it believed had accrued in favor of the United States up to and including Dec. 31, 1919. The exact amount was found to be $292,461.60. The Auditor refused to permit said amounts to be deducted from said tax return and corrected the reports accordingly.

The Commission sustained the Auditor. The Cuyahoga Common Pleas modified the findings of the Commission to the extent of permitting the defendant to deduct from the sum of the ylegal claims and demands owing to it the amounts of income and excess profits tax. The court held the same to be legal bona fide debts of the defendant which were properly the subject of deduction under 5327 GC. The court of Appeals sustained the decision of the Common Pleas without opinion.

The Tax Commission of Ohio then prosecuted error to the Supreme Court, and asked it to reverse the findings of the lower courts. The questions presented for the Supreme Court to decide are: (1) Does 5827 GC. on its face justify the deduction of federal taxes as “debts”? (2) Was this section intended to forbid the deduction in question? (3) Is such a deduction peimitted under Art. 12, Sec. 2, of the Ohio Constftut'on so that the statute can b-' construed consistently v/ith that provision ?