348 U.S. 426 (U.S. Supreme Court 1955)
Commissioner v. Glenshaw Glass is a cornerstone of federal income tax law.
Are punitive or exemplary damages—such as the exemplary component of antitrust treble damages—taxable as gross income under Section 22(a) of the Internal Revenue Code of 1939?
Gross income includes all undeniable accessions to wealth, clearly realized, and over which the taxpayer has complete dominion, unless a specific statutory exclusion applies. The statutory phrase "income from whatever source derived" is sweeping and is not limited to gains derived from capital or labor. Exclusions from income are narrowly construed and apply only when Congress has expressly provided them.
Yes. Punitive and exemplary damages are taxable as gross income because they are undeniable accessions to wealth, clearly realized, and under the taxpayer's dominion, and no statutory exclusion applies.
Glenshaw Glass is foundational for understanding Section 61. It supplies the modern, controlling definition of gross income and clarifies that Eisner v. Macomber's language is not a universal test. The case ensures that windfalls—including punitive damages and similar receipts—are taxable absent a specific exclusion. It is routinely invoked to analyze unconventional receipts (treasure trove, punitive awards, incentive payments, etc.) and to teach that labeling (e.g., "punitive") does not determine taxability. For law students, it frames the default approach: begin with the broad scope of Section 61, then ask whether a narrow statutory exclusion applies.