Lucas v. Earl case brief

Lucas v. Earl case brief

281 U.S. 111, 50 S. Ct. 241;74 L. Ed. 731; 1930 U.S.

CASE SYNOPSIS: Petitioner Commissioner of Internal Revenue sought review of a judgment of the United States Circuit Court of Appeals for the Ninth Circuit, which reversed the imposition of a tax upon the whole of the earned salary of respondent taxpayer by the Commissioner and the Board of Tax Appeals.

FACTS: The taxpayer claimed that he should not be taxed for the whole of the salary and attorney fees earned by him because he and his wife had contracted that any property either of them owned or thereafter acquired, including salaries, would be owned as joint tenants, with right of survivorship. He contended that he should only be taxed for half of his salary and attorney fees based on the contract with his wife. Despite the validity of the contract, the Commissioner of Internal Revenue, and the Board of Tax Appeals imposed a tax upon the whole salary. Their decisions were reversed by the appellate court.

ANALYSIS:

Upon review under writ of certiorari, the Court reversed because there was no doubt that the Revenue Act of 1921, 42 Stat. 227, required salaries to be taxed by those who earned them and provided that the tax could not be escaped by anticipatory arrangements and contracts however skillfully devised to prevent the salary when paid from vesting even for a second in the man who earned it.

CONCLUSION: The Court reversed the appellate court's judgment.

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