Court Opinion

ID: 4479345
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:13:37.00881+00
Date Added: 2024-06-11T15:03:32.306372
License: Public Domain

Dawson, J., concurring: Harrison v. Shaffner, 312 U.S. 579 (1941), settled the proposition that there can be no anticipatory assignment of income unless the assignor is entitled at the time of assignment to receive the income at a future date and is vested with such a right. Paul Teschner was at no time “vested with the right to receive income” under the rules of the contest and, therefore, could not possibly “escape the tax by any kind of anticipatory arrangement.” Consequently, the cases cited by the dissent, Lucas v. Earl, 281 U.S. 111 (1930), Helvering v. Horst, 311 U.S. 112 (1940), and Helvering v. Eubank, 311 U.S. 122 (1940), all of which held that “one vested with the right to receive mcome [does] not escape the tax by any kind of anticipatory arrangement, however skillfully devised,” Harrison v. Shaffner, supra at 582 (emphasis supplied), are inapposite here. It is true that a taxpayer having the right to dispose of income would be taxable on the exercise of such a right where the disposition results in an economic benefit to him. However, in the instant case Paul Teschner had no right of disposition, but only a duty under the contest rules to designate a person under the age of 17 years, 1 month. Compliance with this duty was a condition precedent for entry of persons over that age into the contest. While it might be said concomitantly that there was a right to designate to whom the prize would go if it were won, no economic benefit could be conferred upon anyone when this right was exercised since there was no income upon which such a right of designation could operate at the time the designation was made. If those who disagree with this result fear the prize (annuity policy) will escape taxation, there is no problem because it would appear to be taxable to the daughter under the provisions of section 74,1.E..C. 1954. Mulroney, /., agrees with this concurring opinion.