''Commissioner v. Glenshaw Glass Co.'', 348 U.S. 426 (1955), was an important income tax case before the United States Supreme Court. The Court held as follows: * Congress, in enacting income taxation statutes that comprehend "gains or profits and income derived from any source whatever," intended to tax all gain except that which was specifically exempted. *Income is not limited to "the gain derived from capital, from labor, or from both combined." :*Although the Court used this characterization in '' Eisner v. Macomber'', it "was not meant to provide a touchstone to all future gross income questions." *Instead, income is realized whenever there are "instances of undeniable accessions to wealth, clearly realized, and over which the taxpayers have complete dominion." :*Under this definition, punitive damages qualify as "income" -- even though they are not derived from capital or from labor.

Facts

Two factually distinct cases were consolidated because they presented the same issue. *In one case, the

defendant In court proceedings, a defendant is a person or object who is the party either accused of committing a crime in criminal prosecution or against whom some type of civil relief is being sought in a civil case. Terminology varies from one jurisdic ...

Glenshaw Glass Company had won an award of punitive damages in an

antitrust Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust l ...

lawsuit - A lawsuit is a proceeding by a party or parties against another in the civil court of law. The archaic term "suit in law" is found in only a small number of laws still in effect today. The term "lawsuit" is used in reference to a civil actio ...

. The defendant did not declare this award as income or pay taxes on it, claiming that it was not subject to taxation. The

Internal Revenue Service The Internal Revenue Service (IRS) is the revenue service for the United States federal government, which is responsible for collecting U.S. federal taxes and administering the Internal Revenue Code, the main body of the federal statutory ta ...

brought suit to collect the tax. *In another case, William Goldman Theatres, Inc. neglected to report punitive damages as income. Again, the

sued to collect the tax.

Opinion of the Court

The Supreme Court, in an opinion by Chief Justice

Earl Warren Earl Warren (March 19, 1891 – July 9, 1974) was an American attorney, politician, and jurist who served as the 14th Chief Justice of the United States from 1953 to 1969. The Warren Court presided over a major shift in American constitution ...

, held that the award of treble damages was taxable income. In the opinion, Warren pointed out that the language of section 22(a) (the predecessor of current section 61(a)) was employed by Congress in order utilize "the full measure of its taxing power," as provided for under the Sixteenth Amendment. Essentially, Congress, in enacting section 22(a), intended to tax all gains except those specifically exempted. The Court then held that the amounts received by the taxpayers in this case were "instances of undeniable accessions to wealth, clearly realized, and over which the taxpayers have complete dominion." This three-part "test" for determining income is broader than the earlier test employed by the Court in '' Eisner v. Macomber'', and is to this day the preferred test for identifying gross income.

References

External links

* {{US16thAmendment 1955 in United States case law United States Sixteenth Amendment case law United States Supreme Court cases United States Supreme Court cases of the Warren Court

Facts

Opinion of the Court

See also

References

Further reading

External links