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.
Issue. Whether Respondent should be taxed on the whole of his earnings or just half in light of the contract with his wife?
Held. 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.
There is no doubt that the statute could tax salaries to those who earned them and provide 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.View Full Point of Law