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in some real-world instances. The problem arises not from the
statute, but rather from the court-made elaboration of the
assignment of income doctrine and from our refusal to reexamine
the rules that we have devised. I agree with the majority that
the Congress has the power to revise the statute to reduce or
eliminate the effect of court-made errors, but the courts also
have the right and obligation to correct their own errors.
In Teschner v. Commissioner, 38 T.C. 1003 (1962), a majority
of this Court reexamined several of the seminal cases, rejected
respondent’s efforts to analyze by slogan,9 and determined that
9In Teschner v. Commissioner, 38 T.C. 1003, 1007 (1962), we
explained as follows:
In his ruling, the respondent declared, “The basic
rule in determining to whom an item of income is
taxable is that income is taxable to the one who earns
it.” If by this statement the respondent means that
income is in all events includible in the gross income
of whomsoever generates or creates the income by virtue
of his own effort, the respondent is wrong. If this
were the law, agents, conduits, fiduciaries, and others
in a similar capacity would be personally taxable on
the proceeds of their efforts. The charity fund-raiser
would be taxable on sums contributed as the result of
his efforts. The employee would be taxable on income
generated for his employer by his efforts. Such
results, completely at variance with every accepted
concept of Federal income taxation, demonstrate the
fallacy of the premise.
If, on the other hand, the respondent used the
term “earn,” not in such a broad sense, but in the
commonly accepted usage of “to acquire by labor,
service, or performance; to deserve and receive
compensation” (Webster’s New International
Dictionary),4 then the rule is intelligible but does
not support the conclusion reached by the respondent
(continued...)
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