Jackson v. Commissioner
United States Tax Court
The Motion Picture Association of America, Inc., paid the sum of $ 38,270 to Stephen S. Jackson, upon the termination of his employment at the request of members of the association. The payment was made pursuant to Jackson's suggestion, and after he had executed a general release of all claims against the association, its officers, and members. It was charged by the association on its books of account to salary expense.
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The Motion Picture Association of America, Inc., paid the sum of $ 38,270 to Stephen S. Jackson, upon the termination of his employment at the request of members of the association. The payment was made pursuant to Jackson's suggestion, and after he had executed a general release of all claims against the association, its officers, and members. It was charged by the association on its books of account to salary expense. Held, that said amount was subject to income tax under section 22 (a) of the Internal Revenue Code (1939), and was not a gift exempt under section 22 (b) (3).
1Opinion of the Court
OPINION.
Pierce, Judge:
The contention of petitioners is that the sum of $38,270 paid to Jackson by the Motion Picture Producers Association upon the termination of his employment, was an exempt “gift,” and not taxable income. In support of this position, they assert that the payment was made without legal consideration for the reasons that Jackson had already been amply paid for his services, and had not been employed for any specific term in respect of which additional compensation could be claimed. They submit that the payment must, therefore, have been made by the executive committee of the…
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