Source: https://supreme.justia.com/cases/federal/us/265/189/case.html
Timestamp: 2017-05-27 15:48:46
Document Index: 100594076

Matched Legal Cases: ['§ 212', '§ 228', '§ 230', '§ 230', '§ 213', '§ 327', '§ 233']

United States v. Supplee-Biddle Hardware Co. (full text) :: 265 U.S. 189 (1924) :: Justia U.S. Supreme Court Center Log In
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United States v. Supplee-Biddle Hardware Co. 265 U.S. 189 (1924)
U.S. Supreme CourtUnited States v. Supplee-Biddle Hardware Co., 265 U.S. 189 (1924)United States v. Supplee-Biddle Hardware CompanyNo. 477Argued April 9, 1924Decided May 26, 1924265 U.S. 189APPEAL FROM THE COURT OF CLAIMS
58 Ct. Clms. 343 affirmed. Page 265 U. S. 190
Appeal from a judgment of the Court of Claims allowing recovery of money paid under protest as an income tax. Page 265 U. S. 192
The Revenue Act of 1918, which was passed February 24, 1919 (40 Stat. 1057, c. 18), in prescribing the income to be taxed, deals first with individuals, from § 212 to Page 265 U. S. 193 § 228, inclusive. Then follow provisions for the rate of income tax on corporations, beginning with § 230. Section 233(a) says that, "[i]n the case of a corporation subject to the tax imposed by § 230, the term gross income' means the gross income as defined in § 213," with certain exceptions not here material. Section 213 defines the gross income for individuals as follows:
The Treasury Department, construing these sections, held that the proceeds of insurance policies, paid to a beneficiary which was a corporation, were not exempted, and were included as "gains . . . from any source whatever." Under this ruling, the appellee was forced to pay a tax of $84,737.95 on the proceeds of the two policies of $97,947.28. The Commissioner of Internal Revenue reduced this amount by $29,584.06 in accordance with the powers conferred upon him by §§ 327 and 328 of the Revenue Act of 1918 to reduce the rate of taxation in cases of unusual hardship. There remained, however, the sum of $55,153.89, which tax the appellees paid under Page 265 U. S. 194 protest, and for this, with interest, the Court of Claims gave judgment to the appellee.
It is earnestly pressed upon us that proceeds of life insurance paid on the death of the insured are in fact capital, and cannot be taxed as income under the Sixteenth Amendment. Eisner v. Macomber, 252 U. S. 189, 252 U. S. 207; Page 265 U. S. 195 Merchants' Loan & Trust Co. v. Smietanka, 255 U. S. 509, 255 U. S. 518. We are not required to meet this question. It is enough to sustain our construction of the act to say that proceeds of a life insurance policy paid on the death of the insured are not usually classed as income.
The result of the construction put by the government upon §§ 233, 230, and 213 Page 265 U. S. 196 would be to impose a double tax on the proceeds of the two policies in this case over and above $40,000 -- i.e., an income tax and an estate tax. Such a duplication, even in an exigent war tax measure, is to be avoided unless required by express words.