Colosal Deductions

Colossal Deductions

U. S. citizens racking their brains for income-tax deductions gasped last week at the ingenuity of fertile-minded Cinemagnate Joseph M. Schenck, who went on trial in Manhattan charged with evading $412,045 income taxes in 1935-37. Some Schenck "business expenses" which the Government contended were too super-colossal even for the chairman of Twentieth Century-Fox:

>$136 for flying his masseuse from Hollywood to Manhattan.

>$536 for a personal barber.

>$2,092 for weekending in a California resort with two women friends.

>$40,000 for half maintenance of his yacht.

All told, the Government charged, Schenck claimed it cost him $89,000 in expenses to earn his $117,000 salary in 1937. (His total 1937 income, including bonuses, dividends, etc.: $594,225.) The defense as outlined by Schenck's attorney: "He spent money lavishly and entertained lavishly. It was his business to spend money in order to make money for his company."

Far from cheating his Government, defense counsel contended, Schenck had paid $165,000 too much in taxes for 1935-37 and would try to get it back.

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