Helvering v. Eubank

United States Supreme Court

311 U.S. 122 (1940)

A federal taxpayer’s earned commissions are taxable income to the taxpayer, even if the taxpayer assigns the right to receive the commission payments to an assignee.

Relevant Facts

Eubank, a life-insurance agent (the plaintiff), was promised future commissions on the renewal of insurance policies that he sold. The value of these commissions depended on the premiums eventually paid on the renewed policies by the policyholders. The plaintiff assigned the rights to two of his commissions to a trustee in 1924 and 1928. The trustee received the two commission payments in 1933. Helvering, commissioner of internal revenue (the defendant), determined that the plaintiff’s 1933 federal tax return should have included the commissions as taxable income.

The plaintiff petitioned the Board of Tax Appeals which sustained the commissioner’s determination. The United States Court of Appeals for the Second Circuit reversed the Board of Tax Appeals’ decision. The United States Supreme Court granted certiorari.

Issue

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Holding & Reasoning

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Concurrence

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Dissent

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Last updated:

December 29, 2020

Judicial Opinion

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Procedural History

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Citations

311 U.S. 122 (1940)