Hobart M. Griggs and Gladys B. Griggs v. The United States

JONES, Chief Judge.

The issue in this case is whether an award made to a Government employee under the Incentive Awards Act should be taxed as income. The question turns on whether the prize money is excluded from the plaintiffs’ gross income by the provisions of section 74(b) of the Internal Revenue Code (26 U.S.C. § 74 (1958 ed.)).

By the terms of the Internal Revenue Code 1 all income from whatever source derived is taxable unless it comes within specific statutory exceptions.

Section 74(b) sets out the conditions which must be met in order to bring prizes and awards within the exceptions.…