Commissioner v. Giannini

Giannini (plaintiff) was entitled under a corporate compensation plan to a large share of net profits, but once he learned the amount he would receive for one part of the year, he refused the remainder of his salary for the rest of the year and merely suggested the corporation put that money to better use; the corporation, entirely on its own initiative, then donated that unclaimed salary to the University of California. Giannini and his wife excluded the donated amount from their income, the Commissioner (defendant) determined it should have been included, and the Board of Tax Appeals ruled for Giannini.