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United States v. Lewis

Citation. United States v. Lewis, 340 U.S. 590, 71 S. Ct. 522, 95 L. Ed. 560, 51-1 U.S. Tax Cas. (CCH) P9211, 40 A.F.T.R. (P-H) 258, 1951-1 C.B. 21, 1951 P.H. P72,005 (U.S. Mar. 26, 1951)
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Brief Fact Summary.

Respondent received an employee bonus of $22,000. He reported this as income but later found out he was really only entitled to $11,000.

Synopsis of Rule of Law.

If one receives income under a claim of right and without restriction, then it is income for that taxable year.


Respondent Lewis sought a refund of an alleged overpayment of his 1944 income tax. Respondent reported $22,000 as a bonus. He was forced to return $11,000 because he was overpaid, but had always believed the full amount was his. The Government claims that Respondent should have to deduct the $11,000 he had to return as a loss on his 1946 tax return. Respondent claims he should get to recomputed the 1944 tax year income.


Should the bonus be included in Respondent’s 1944 income tax return?


Justice Black issued the opinion for the Supreme Court of the United States in holding that Respondent was properly required to report the bonus as income for the 1944 tax year.


Justice Douglas issued a dissenting opinion arguing that the issue the Court should have examined is whether or not Respondent is entitled to a refund of his tax paid.


The Supreme Court found that since Respondent received the money under a claim of right and without restriction on the disposition, then it was properly reported for the tax year 1944. The fact that he was mistaken as to his right to the money does not change the rule of which tax year it should be included in.

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