Commissioner v. Glenshaw Glass Co.
Commissioner v. Glenshaw Glass Co., 348 U.S. 426 (1955), was an important income tax case before the United States Supreme Court. The Court held as follows: Congress, in enacting income taxation statutes that comprehend "gains or profits and income derived from any source whatever," intended to tax all gain except that which was specifically exempted. Income is not limited to "the gain derived from capital, from labor, or from both combined." Although the Court used this characterization in Eisner v. Macomber, it "was not meant to provide a touchstone to all future gross income questions." Instead, income is realized whenever there are "instances of [1] undeniable accessions to wealth, [2] clearly realized, and [3] over which the taxpayers have complete dominion." Under this definition, punitive damages qualify as "income" -- even though they are not derived from capital or from labor. Facts Two factually distinct cases were consolidated because they presented the same issue. In one case, the defendant Glenshaw Glass Company had won an award of punitive damages in an antitrust lawsuit. The defendant did not declare this award as income or pay taxes on it, claiming that it was not subject to taxation. The Internal Revenue Service brought