James v. United States Case

Abstract

This research paper focuses on highlighting the aspects of James v. United States Case. James v. United States Case (1961) is a case in which taxable income issues were highlighted along with the consequences that can be faced by an individual due to swindling and embezzling of lawful owner of money. By controlling these illegal or fraudulent activities we can have controlled and lawful society.

Table of Contents

Introduction4

Discussion5

Conclusion7

References9

James v. United States Case

Introduction

The James v. United States (1961) is a case in which the Supreme Court of United States detained that the money acquired by a tax payer through illegal ways that was a taxable income will not be tolerated at all under the US law (366 U.S. 213). An individual is made liable to pay back that illegally obtained money along with the profits earned on it to the actual owner of the money. Under this case it was declared that the embezzled money is taxable income of an individual who has embezzled it in the year of embezzlement under section 22(a) of the International Revenue Code of 1939 that explained gross income as an amount that include profits and income obtained from any of the source.

According to 61(a) of the International Revenue Code of 1954 it was claimed that gross income is a complete sum of income that is obtained from whatever sources derived was overruled by Commissioner v. Wilcox 327 UD 404. Eugene James was defendant in this case, who was working in labor union that had cheated an amount more than $738 thousand in the union funds and he did not report this money on his tax return. Eugene James his level best in dodging for tax and he further declared in his security that illegal funds did not comprise of an income that is taxable. He had an argument in the court in a way that an individual who misuses money should not be treated as owning received income as that individual has just illegally obtained money and he or she is obliged to return that money to the actual owner. Eugene James was declared as convict and was sentenced for three years in prison as court did not accept his argument.

Discussion

In this case United States Supreme Court was asked to pay attention towards this case and present facts and figures related to it that was the receipt of illegally acquired funds comprises of income that is taxable to the one who have committed an illegal activity or not even though he or she is obligated to pay it back. Various rationales were studied for resolving this case and the opinions of majority were written by Justice Stewart and Brennan along with Chief Justice Earl Warren. From the beginning the discussion was based on identifying what is gross income and what will be the basis on which the tax will be charged (United States v. Schwimmer, 968 F.2d 1570, 1583-1584 (2d Cir. 1992).

The Supreme Court recorded that the capacity of ...