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Lucas v. Earl

Citation. Lucas v. Earl, 281 U.S. 111, 50 S. Ct. 241, 74 L. Ed. 731, 2 U.S. Tax Cas. (CCH) P496, 8 A.F.T.R. (P-H) 10287 (U.S. Mar. 17, 1930)
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Brief Fact Summary.

Respondent had an arrangement with his wife where they owned and received everything as joint tenants. He sought to claim only half of his salary earned as income instead of the entire salary that was paid him.

Synopsis of Rule of Law.

The individual who earns the salary or income is the one who should be properly taxed.


Respondent, Earl, and his wife entered into a contract wherein all property that they have or received is taken as joint tenants with rights of survivorship. Respondent sought to only be taxed on half of his earnings for 1920 and 1921. The Commissioner of Internal Revenue and Board of Tax Appeals held that the tax should be on the whole, but the Court of Appeals reversed.


Whether Respondent should be taxed on the whole of his earnings or just half in light of the contract with his wife?


Justice Holmes issued the opinion for the Supreme Court of the United States in reversing the Court of Appeals and holding that Respondent should be taxed on all of his earnings.


The Supreme Court found that the law is clear that the one who earns the salary should be taxed on it. Contracts and other arrangements should not allow someone to avoid this income tax.

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