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CAMMARANO V. UNITED STATES, 358 U. S. 498 (1959)

U.S. Supreme Court

Cammarano v. United States, 358 U.S. 498 (1959)

Cammarano v. United States

No. 29

Argued November 19, 1958

Decided February 24, 1959*

358 U.S. 498


1. In computing federal income taxes, sums paid by a taxpayer to an organization which expended them in extensive publicity programs designed to persuade voters to cast their ballots against proposed state initiative legislation which would have seriously affected or wholly destroyed the taxpayer's business may not be deducted from gross income as "ordinary and necessary" business expenses under § 23(a)(1)(A) of the Internal Revenue Code of 1939, as interpreted by §§ 29.23 (o)-1 and 29.23 (q)-1 of Treasury Regulations 111, which forbid the deduction of sums expended for "the promotion or defeat of legislation." Pp. 358 U. S. 499-507.

(a) The Regulations apply to expenditures made in connection with efforts to promote or defeat legislation by persuasion of the general public as well as efforts to influence legislative bodies directly through "lobbying." Pp. 358 U. S. 504-505.

(b) They apply to expenses incurred in furthering or combatting proposed initiative measures as well as bills pending before legislatures. Pp. 358 U. S. 505-507.

2. As so interpreted, the Regulations are not in conflict with § 23 (a)(1)(A), and are a valid exercise of the Commissioner's rulemaking power. Pp. 358 U. S. 507-512.

3. As thus construed and applied, the Regulations do not present a substantial constitutional question under the First Amendment. Speiser v. Randall, 357 U. S. 513, distinguished. Pp. 358 U. S. 512-513.

246 F.2d 751 and 251 F.2d 724 affirmed.

Page 358 U. S. 499

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