- 50 -
employment, etc., attributable to services rendered over a number
of years. The statutory mechanism allowed the taxpayer to
compute income tax for the year of receipt as if the back pay or
other compensation had been ratably received during the years
earned. The theme of those cases, without regard to assignment
of income principles, was this Court’s unwillingness to provide
relief beyond the express terms of what was felt to be a generous
statutory relief provision.
In each of those cases, this Court treated the problem as
one of statutory interpretation, before wrapping itself in the
mantle of Lucas v. Earl, 281 U.S. 111 (1930), and the Supreme
Court’s other landmark cases on assignment of income. So said
Judge Raum, speaking for the Court in O’Brien v. Commissioner, 38
T.C. at 710:23
Although there may be considerable equity to the
taxpayer’s position, that is not the way the statute is
written. Without the benefit of section 1303 [the 1954
Code equivalent of 1939 Code section 107], there would
be no relief whatever, and the relief granted cannot go
beyond these very provisions. They provide merely for
a computation of tax based upon “the inclusion of the
respective portions of such back pay in the gross
income for the taxable years to which such portions are
23 The taxpayer in O’Brien v. Commissioner, 38 T.C. 707
(1962), affd. per curiam 319 F.2d 532 (3d Cir. 1963), had not
claimed on his return that the fee should offset the recovery,
with the resulting reduced amount to be spread back. The
taxpayer had reported on his 1957 income tax return the receipt
of a backpay award, had spread back the gross amount of the award
over the years of service (1952-1955), and then had apportioned
and spread back the legal fees over the same years. This, the
Court held, the statutory spreadback provision did not permit.
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