James v. United States

James (defendant) embezzled $738,000 from his union and its insurer between 1951 and 1954, never reporting it as income and remaining legally obligated to return it; he was convicted of willful tax evasion, and the court of appeals affirmed. At the time of his embezzlement, existing Supreme Court precedent (Commissioner v. Wilcox) held embezzled funds were not taxable income, since the embezzler has no bona fide claim of right and must legally return the money.