348 U.S. 426 (1955)
Commissioner v. Glenshaw Glass Co.
Whether punitive damages constitute gross income under the Internal Revenue Code of 1939 and are therefore subject to federal income taxation.
Gross income includes all income from whatever source derived, including punitive damages, as it constitutes an undeniable accession to wealth, clearly realized, and over which the taxpayer has complete dominion.
The Supreme Court held that punitive damages constituted gross income under the Internal Revenue Code and should be taxed as such.
This case is significant because it clarified the scope of 'gross income' for tax purposes, establishing that income is not limited to wages or salaries but includes all material gains. It underscored the necessity for clear legislative definitions and judicial interpretation of tax terms, ensuring taxpayers cannot easily evade income recognition through the nature of the payment received. Glenshaw Glass Co. is often referred to in subsequent tax discussions and case law, reinforcing the comprehensive nature of income within the tax code.