Frank Murphy

“ The very essence of taxable income, as that concept is used in Section 22 (a) , is the accrual of some gain, profit or benefit to the taxpayer. This requirement of gain, of course, must be read in its statutory context. Not every benefit received by a taxpayer from his labor or investment necessarily renders him taxable. Nor is mere dominion over money or property decisive in all cases. In fact, no single conclusive criterion has yet been found to determine in all situations what is a sufficient gain to support the imposition of an income tax. ”

“ Thus if the taxpayer uses the property himself so as to secure a gain or profit therefrom, he may be taxable to that extent. And if the unconditional indebtedness is cancelled or retired taxable income may adhere, under certain circumstances, to the taxpayer. But apart from such factors the bare receipt of property or money wholly belonging to another lacks the essential characteristics of a gain or profit within the meaning of Section 22 (a) .
We fail to perceive any reason for applying different principles to a situation where one embezzles or steals money from another. ”

“ Applying that rule to this case, the Commissioner urges that the act of appropriating the property of another to one's own use is an exercise of a major power of ownership even though the act is consciously and entirely wrongful. As against all the world except the true owner the embezzler is the legal owner, at least while he remains in possession. The money or property acquired in this unlawful manner, it is said, should therefore betreated as taxable income to the wrongdoer under Section 22 (a) . We cannot agree. ”