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attributable to the person entitled to
receive it, although he assigns his right in
advance of realization, and although, in the
case of income derived from the ownership of
property, he transfers the property producing
the income to another as trustee or agent, in
either case retaining all the practical
benefits of ownership.
Section 1(a) of the 1954 Code imposes a tax on the
“income of every individual.” Where an individual
neither receives nor has the right to receive income,
he is not the taxable individual within the
contemplation of the statute. There is no basis in the
statute or in the decided cases for a construction at
variance with this fundamental rule.
Reviewed by the Court.
Decision will be entered
for the petitioners.
The majority in the instant case tax to petitioners
substantial funds that petitioners did not receive, were never
entitled to receive, and never turned their backs on. They do so
in the name of the assignment of income doctrine. The majority
acknowledge that there may be injustice in so doing, and that the
injustice may well be even greater in other real-life settings
than in the instant case. They contend that precedents compel
them to this result and that relief can come only from the hills
(Psalm 121), or at least from Capitol Hill. But this Court has
shown in Teschner v. Commissioner, supra, that reexamination of
the origins of the assignment of income doctrine can sharpen our
understanding of the concepts and make more rational the
application of that doctrine. We do not lightly overrule our
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