Minor v. United States

Physician Ralph Minor (plaintiff) elected to participate in his employer's deferred-compensation plan, agreeing in exchange to refrain from working for competitors and from practicing medicine after retirement. Funds set aside for the plan were held in a trust whose sole beneficiary was the employer, and participants like Minor had no rights to the trust's assets at all. The IRS (defendant) sought to tax Minor on the deferred compensation as it was earned rather than when it was actually paid; Minor paid the tax and sued for a refund, winning in the district court, and the IRS appealed.