McCann v. United States
United States Court of Claims
81-2 U.S.T.C. Sec. 9689 (Ct. Cl. 1981)
Elvia and Leone McCann (plaintiffs) attended a four-day, company-paid Las Vegas seminar after Mrs. McCann's insurance-company employer invited the roughly 47 of its 400 agents who had met their sales quota; the company always chose exciting destinations rather than the agents' home city and offered ample entertainment, and while Mrs. McCann spent a few hours in panels and speeches, most of her time -- and all of her husband's -- went to company-paid meals, parties, shows, and leisure activities. Attendance was not mandatory and non-attendees faced no penalty. After the IRS audited the McCanns and assessed a deficiency for failing to report the trip's value as gross income, the McCanns paid the back taxes and sued the United States (defendant) for repayment.
Whether, for purposes of gross income, a federal taxpayer must report the value of all income from whatever source derived, including any economic or financial benefit received as compensation, regardless of the form in which the income is received.