Surasky v. United States 325 F.2d 191 (5th Cir. 1963) Surasky was a shareholder in Montgomery Ward. He attempted to get a new Board of Trustees elected. This involved a 'proxy campaign' to convince the other shareholders to vote for Surasky's candidates. That campaign cost Surasky $17k. When he filed his taxes, Surasky claimed a $17k deduction as an expense related to the production of income. 26 U.S.C. §212 allows for deductions related to the production and collection of income. The IRS denied the deduction. Surasky appealed. The Trial Court found for the IRS. Surasky appealed. The Trial Court found that there wasn't a strong connection between the proxy campaign and production of income for Surasky. Therefore, the expenses were not deductible. There was no guarantee that the new Board would actually make the price of Surasky's stock rise. The Appellate Court reversed and allowed the deduction. The Appellate Court found that even if the gain was speculative, the expenses were still deductible under §212. The Court noted that nothing in §212 required a proximate relationship between the expenses and the potential production of income. This decision was a bit of a departure from the language implied in Welch v. Helvering (290 U.S. 111 (1933)), which implied that there was some objective standard to what was ordinary and necessary.