Walker v. Commissioner
United States Tax Court
A railway company paid to one of its officers, who had served it for 4 1/2 years and resigned for reasons of health, a sum equivalent to 6 months' salary, which it called a "gift" to be paid in two equal installments "as a token of appreciation for his loyalty to the best interests of the Company during the period of his employment." The company charged the payments to operating expense, and deducted them on its income tax returns.
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A railway company paid to one of its officers, who had served it for 4 1/2 years and resigned for reasons of health, a sum equivalent to 6 months' salary, which it called a "gift" to be paid in two equal installments "as a token of appreciation for his loyalty to the best interests of the Company during the period of his employment." The company charged the payments to operating expense, and deducted them on its income tax returns. Held, that the amount received by the officer was "compensation" subject to income tax under section 22 (a) of the Internal Revenue Code (1939), and not a "gift"…
1Opinion of the Court
OPINION.
Pierce, Judge:
Whether a payment received from a former employer at or after the termination of the employment is “compensation” subject to income tax under section 22 (a) of the Internal Revenue Code (1939) ,1 or a “gift” exempt from income tax under section 22 (b) (3), depends upon the intention with which the payment was made; and this is to be determined from all the facts and surrounding circumstances. Wallace v. Commissioner, (C. A. 5) 219 F. 2d 855, 857; Willkie v. Commissioner, (C. A. 6) 127 F. 2d 953, 955, certiorari denied 317 U. S. 659; Fisher v. Commissioner, (C. A. 2) 59…
2Cases cited17 opinions
- Old Colony Trust Co. v. CommissionerSupreme Court of the United States · 1929
- Bogardus v. CommissionerSupreme Court of the United States · 1937
- Noel v. ParrottCourt of Appeals for the Fourth Circuit · 1926
- Willkie v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1942
- Fisher v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1932
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3Cited by12 opinions
- Silverman v. CommissionerUnited States Tax Court · 1957
- Jackson v. CommissionerUnited States Tax Court · 1956
- Alhadi v. Comm'rUnited States Tax Court · 2016
- Duberstein v. CommissionerUnited States Tax Court · 1958
- Estate of Sweeney v. CommissionerUnited States Tax Court · 1979
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