Internal Revenue Service
Revenue Ruling

TaxLinks.com   sm

 Rev. Rul. 68-2

1968-1 C.B. 61

Sec. 162

Full Text

Rev. Rul. 68-2

X is a nonprofit corporation organized and operated for the purpose of eliminating prejudice and discrimination in connection with securing housing for minority groups. It is exempt from Federal income tax under section 501(a) of the Internal Revenue Code of 1954 as an organization described in section 501(c)(3) of the Code. As part of its activities, X corporation entered into agreements with various business concerns in the community whereby X undertook to act as general advisor and consultant to employers with respect to securing housing for their minority group employees and all matters pertaining thereto. The fee paid to X by each employer for services rendered is based on and varies with the number of employees. Held , the fees paid to X corporation pursuant to the consulting agreements are ordinary and necessary business expenses deductible by the employers under section 162 of the Code.