COMMISSIONER V. GLENSHAW GLASS 348 US 426 (TAX)

Money received as exemplary damages for fraud or as the punitive 2/3 portion of a treble damage antitrust recovery must be reported by a taxpayer as "gross income".

1. In determining what constituted "gross income", effect must be given to the catch-all language "gains or profits and income derived from any source whatever."
2. The mere fact that such payments are extracted from the wrongdoers as punishment for unlawful conduct cannot detract from their character as taxable income to the recipients.
3. A different result is not required by the fact that section 22(a) was reenacted without change after the Board of Tax appeals had held punitive damages nontaxable in Highland Farms Corp.
4. The legislative history of the Internal Revenue Code of 1954 does not require a different result. The definition of gross income was simplified, but no effect upon its present broad scope was intended.
5. Punitive damages cannot be classified as gifts, nor do they come under any other exemption in the Code.