Appeal of W. H. Harris Grocery Co.

*218opinion. •

We are satisfied from the evidence that the additional compensation to the officers and employees of the taxpayer for the year 1918 was determined and became a liability of the corporation during that year. The evidence convincingly discloses that a directors’ meeting was held within the year, at which meeting the amount of additional compensation was determined, and these amounts were actually set up on the taxpayer’s books as liabilities to the several officers and employees within the year. No *219formal minutes of this meeting were made in the corporate minute book, and no formal- action was taken until February 15, 1919. That formal action of the board of directors is not essential to the creation of a liability against the corporation, if action was in truth intended, was held in Appeal of Reub Isaacs & Co., 1 B. T. A. 45. We therefore are of opinion that the additional compensation authorized for the year 1918 was a proper deduction for that year.

The evidence with respect to the year 1919 leaves us unconvinced that there was any competent action on the part of the directors which could create a liability against the corporation for that year. All the evidence points to action in 1920, and the determination of the Commissioner disallowing the additional salary deduction in. 1919 must be approved.