William M. Wood (defendant) served as the president of the American Woolen Company from the years 1918 to 1920. In 1916, the American Woolen Company adopted a resolution to pay the income taxes of the company’s officers. For earnings in 1918, Wood owed $681,169.88 in federal taxes. For earnings in 1919, Wood owed $351,179.27 in federal taxes. In accordance with its 1916 resolution, the American Woolen Company paid Wood’s taxes for both years. The Board of Tax Appeals found that the tax payments made by the company on Woods’ behalf constituted additional income.