Source: https://openjurist.org/348/us/434
Timestamp: 2019-04-23 12:06:37+00:00

Document:
We have this day decided that the recovery of punitive damages for fraud or antitrust violation is reportable as gross income within the meaning of § 22(a). Commissioner v. Glenshaw Glass Co., 349 U.S. 426, 75 S.Ct. 473. The reasons which dictated that result are equally compelling here. We see no significant difference in the nature of these receipts which might make that ruling inapplicable. As in Glenshaw, the taxpayer realized the money in question free of any restrictions as to use. The payments in controversy were neither capital contributions nor gifts. Cf. Texas & Pacific R. Co. v. United States, 286 U.S. 285, 52 S.Ct. 528, 76 L.Ed. 1108. There is no indication that Congress intended to exempt them from coverage. In accordance with the legislative design to reach all gain constitutionally taxable unless specifically excluded, we conclude that the petitioner is liable for the tax and the judgment is affirmed.
48 Stat. 881, 15 U.S.C. § 78a et seq., 15 U.S.C.A. § 78a et seq.
54 Stat. 789, 15 U.S.C. § 80a-1 et seq., 15 U.S.C.A. § 80a-1 et seq.
48 Stat. 896, 15 U.S.C. § 78p, 15 U.S.C.A. § 78p.
54 Stat. 837, 15 U.S.C. § 80a-29, 15 U.S.C.A. § 80a-29.
'(a) General definition. 'Gross income' includes gains, profits, and income derived from salaries, wages, or compensation for personal service * * * of whatever kind and in whatever from paid, or from professions, vocations, trades, businesses, commerce, or sales, or dealings in property, whether real or personal, growing out of the ownership or use of or interest in such property; also from interest, rent, dividends, securities, or the transaction of any business carried on for gain or profit, or gains or profits and income derived from any source whatever. * * *' (Emphasis added.) 53 Stat. 9, 53 Stat. 574, 26 U.S.C. § 22(a), 26 U.S.C.A. § 22(a).
There was, however, no disagreement among lower courts which faced the question of the taxability of a § 16(b) recovery of 'insider profits.' See Park & Tilford Distillers Corp. v. United States, 107 F.Supp. 941, 123 Ct.Cl. 509; Noma Electric Corp., 12 T.C.M. 1 (CCH Tax Ct. Mem. Dec. 1953).

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