U.S. Supreme Court
James v. United States, 366 U.S. 213 (1961)
James v. United States

No. 63

Argued November 17, 1960

Decided May 15, 1961

366 U.S. 213

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Syllabus

1. Embezzled money is taxable income of the embezzler in the year of the embezzlement under § 22(a) of the Internal Revenue Code of 1939, which defines "gross income" as including "gains or profits and income derived from any source whatever," and under § 61(a) of the Internal Revenue Code of 1954, which defines "gross income" as "all income from whatever source derived." Commissioner v. Wilcox, 327 U. S. 404, overruled. Pp. 366 U. S. 213-222.

2. After this Court's decision in Commissioner v. Wilcox, supra, petitioner embezzled large sums of money during the years 1951 through 1954. He failed to report those amounts as gross income in his income tax returns for those years, and he was convicted of "willfully" attempting to evade the federal income tax due for each of the years 1951 through 1954, in violation of §145(b) of the Internal Revenue Code of 1939 and § 7201 of the Internal Revenue Code of 1954.

Held: the judgment affirming the conviction is reversed, and the cause is remanded with directions to dismiss the indictment. Pp. 366 U. S. 214-215, 222.

273 F.2d 5, reversed.

MR. CHIEF JUSTICE WARREN announced the judgment of the Court and an opinion in which MR. JUSTICE BRENNAN, and MR. JUSTICE STEWART concur.

The issue before us in this case is whether embezzled funds are to be included in the "gross income" of the embezzler in the year in which the funds are misappropriated