United Shoe Stores Co. v. Commissioner

*74OPINION.

Section 209 of the Kevenue Act of 1917 provides for special relief only in the case of a trade or business having no invested capital or not more than a nominal capital, and section 210 provides for such relief in a case where the Secretary of the Treasury is unable satisfactorily to determine the invested capital. The taxpayer does not fall within any of these provisions.

Section 327 (d) of the 1918 Act provides for special relief only where an exceptional hardship is worked upon the taxpayer by reason of abnormal conditions affecting the capital or income of the corporation. It appears that after January 1, 1918, the salary of the president was increased to $4,730. This appears to have been more nearly an adequate compensation for the services rendered by Diamond than was paid in 1917, although it still may have been less than the average compensation paid for similar services, but the situation with reference to the salary after January 1, 1918, was not such as to create an abnormal condition affecting the income of the corporation.

*75The taxpayer contends that because of the efficient operation of the' business, resulting in a turnover of its capital far in excess of the average turnover, there is an abnormal condition affecting the capital or income of the corporation. With this contention we can not agree. Efficient operation may cause a large return on the invested capital, but it is not such an abnormal condition affecting the capital or income as would be required to bring the taxpayer within the provisions of the special assessment sections of the Act.