Veit v. Commissioner
United States Tax Court
8 T.C. 809 (1947)
Howard Veit (plaintiff), executive vice president of a cotton-goods company, earned a fixed salary plus a 10 percent profit bonus in 1939 and 1940, with both years' bonuses originally due in 1941. In 1940, wanting to work less, Veit negotiated a restructured employment arrangement with the company that, among other bargained-for terms, deferred payment of the 1940 bonus until 1942. The commissioner (defendant) determined Veit had constructively received the 1940 bonus in 1941 regardless of the new agreement, and Veit petitioned the Tax Court for redetermination.
Whether, for federal tax purposes, a taxpayer constructively receives a deferred payment in the year of deferral if the sole purpose for the deferral is to change the year the payment is taxable.