Famous Tax Court Cases
Comm'r v. Glenshaw Glass Co., 348 U.S. 426 (1955) - Glenshaw Glass (hereafter "Glenshaw") was a glass manufacturer. Glenshaw sued Hartford-Empire Company (hereafter "Hartford") - a company which had provided Glenshaw with equipment to run its operations. Glenshaw and Hartford settled out of court and it was determined that approximately $325,000 of the settlement represented punitive damages as well as antitrust damages. Glenshaw asserted that this amount was nontaxable under the predecessor of Internal Revenue Code Section 61(a). The Glenshaw Glass case was consolidated with another case whereby a company that was awarded punitive damages argued the punitive damages were nontaxable under the same statute.
The Supreme Court held that the punitive damages and antitrust damages were all taxable as "gross income" under the Internal Revenue Code. The Court reasoned that the statute used "broad phraseology" and that Congress intended to "tax all gains except those specifically exempted." In an oft-quoted sentence, the Court provided that "[h]ere we have instances of undeniable accessions to wealth, clearly realized, and over which the taxpayers have complete dominion."
United States v. Kirby Lumber Co., 284 U.S. 1 (1931) - Kirby Lumber Co. (hereafter "Kirby") issued bonds in a public market and subsequently repurchased the bonds at a discount. The difference in the amount it received in the issuance and the repurchase amounted to $137,521.30. Kirby Lumber argued that it did not have gross income under the Internal Revenue Code and thus was not taxable on the $137,521.30 difference. The Supreme Court disagreed, stating there had been a "clear gain" and that Kirby had "realized within the year an accession to income..."
Gregory v. Helvering (1935) (business purpose and substance over form)
Jenkins v. Comm'r (T.C. Memo 1983)
Comm'r v. Duberstein (1960) (gifts)
Taft v. Bowers (1929) (gift appreciation)
Welch v. Helvering (1933) (ordinary and necessary expenses)
Deputy v. Dupont (1940) (ordinary under 162)
Wickwire v. Reinecke (1927) (presumption of correctness)
Flora v. U.S. (1958) (full refund rule)
Quill v. North Dakota (nexus and sales tax)
Lucas v. Earl (1930) (assignment of income doctrine)
Helvering v. Horst (1940) (assignment of income doctrine)
Golsen v. Comm'r (T.C. 1970) (Tax Court will follow precedent of where appeal will go)
North American Oil Consolidated v. Burnet (1932) (claim of right doctrine)
U.S. v. Lewis (1951) (claim of right doctrine)
Crane v. Comm'r (1947) (nonrecourse debt and basis)
Comm'r v. Tufts (1983) (debt relief of nonrecourse debt and amount realized)
Cottage Savings Assoc. v. Comm'r (1991) (realization events)
Corn Products Refining Co. v. Comm'r (1955)
Arkansas Best Corp v. Comm'r (1988)
The Supreme Court held that the punitive damages and antitrust damages were all taxable as "gross income" under the Internal Revenue Code. The Court reasoned that the statute used "broad phraseology" and that Congress intended to "tax all gains except those specifically exempted." In an oft-quoted sentence, the Court provided that "[h]ere we have instances of undeniable accessions to wealth, clearly realized, and over which the taxpayers have complete dominion."
United States v. Kirby Lumber Co., 284 U.S. 1 (1931) - Kirby Lumber Co. (hereafter "Kirby") issued bonds in a public market and subsequently repurchased the bonds at a discount. The difference in the amount it received in the issuance and the repurchase amounted to $137,521.30. Kirby Lumber argued that it did not have gross income under the Internal Revenue Code and thus was not taxable on the $137,521.30 difference. The Supreme Court disagreed, stating there had been a "clear gain" and that Kirby had "realized within the year an accession to income..."
Gregory v. Helvering (1935) (business purpose and substance over form)
Jenkins v. Comm'r (T.C. Memo 1983)
Comm'r v. Duberstein (1960) (gifts)
Taft v. Bowers (1929) (gift appreciation)
Welch v. Helvering (1933) (ordinary and necessary expenses)
Deputy v. Dupont (1940) (ordinary under 162)
Wickwire v. Reinecke (1927) (presumption of correctness)
Flora v. U.S. (1958) (full refund rule)
Quill v. North Dakota (nexus and sales tax)
Lucas v. Earl (1930) (assignment of income doctrine)
Helvering v. Horst (1940) (assignment of income doctrine)
Golsen v. Comm'r (T.C. 1970) (Tax Court will follow precedent of where appeal will go)
North American Oil Consolidated v. Burnet (1932) (claim of right doctrine)
U.S. v. Lewis (1951) (claim of right doctrine)
Crane v. Comm'r (1947) (nonrecourse debt and basis)
Comm'r v. Tufts (1983) (debt relief of nonrecourse debt and amount realized)
Cottage Savings Assoc. v. Comm'r (1991) (realization events)
Corn Products Refining Co. v. Comm'r (1955)
Arkansas Best Corp v. Comm'r (1988)