TAXATION-FEDERAL INCOME TAX-ACCOUNTING FOR MONEY MISTAKENLY RECEIVED UNDER A CLAIM OF RIGHT

Authors

Allan Neef, University of Michigan Law SchoolFollow

Abstract

The plaintiff taxpayer, as the general manager of a manufacturing corporation, received a bonus of approximately $22,000 for the 1944 calendar year, pursuant to a percentage-of-net-profits bonus arrangement. In 1946, a state court found that this bonus had been erroneously computed, and that the terms of the agreement only called for a payment to the plaintiff of about $11,000 for the prior year. As a result of this adverse judgment, the plaintiff repaid the excess to the corporation, and filed an amended tax return and a timely claim for a refund of the prior tax on such amount with the Commissioner of Internal Revenue. Although the Commissioner disallowed the claim, the Court of Claims ruled that the plaintiff was entitled to a refund. On certiorari to the Supreme Court to review the Court of Claims ruling, held, with Justice Douglas dissenting, that the claim was properly disallowed by the Commissioner. United States v. Lewis, 340 U.S. 590, 71 S.Ct. 522 (1951).

Recommended Citation

Allan Neef, TAXATION-FEDERAL INCOME TAX-ACCOUNTING FOR MONEY MISTAKENLY RECEIVED UNDER A CLAIM OF RIGHT, 49 Mich. L. Rev. 1251 (1951).
Available at: https://repository.law.umich.edu/mlr/vol49/iss8/24