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Towne v. Eisner, 245 U.S. 418 (1918)
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General SummaryThis case is from a collection containing the full text of over 16,000 Supreme Court cases from 1793 to the present. The body of Supreme Court decisions are, effectively, the final interpretation of the Constitution. Only an amendment to the Constitution can permanently overturn an interpretation and this has happened only four times in American history.
Towne v. Eisner, 245 U.S. 418 (1918)
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Towne v. Eisner No. 563 Argued December 12, 1917 Decided January 7, 1918 245 U.S. 418
ERROR TO THE DISTRICT COURT OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK
Syllabus
In an action to recover back money collected and retained by the government, over plaintiff’s protest, as a tax on income under the Income Tax Law of 1913, plaintiff alleged that that upon which the tax was levied, a stock dividend based on accumulated profits, was not "income" within the true intent of the statute, and that, if the statute so intended, it was so far unconstitutional because, in the Sixteenth Amendment, upon which its validity depended, the term "income" could not be construed to embrace such dividends. Held that there was thus presented not merely a question whether the statute had been wrongly understood and applied, but also a question of the scope of the Amendment, which afforded jurisdiction to review both questions by direct writ of error to the district court.
The value of new shares, issued as a stock dividend and representing merely surplus profits transferred to the capital account of the corporation, is not taxable to the share holders as income within the meaning of the Income Tax Law of 1913. So held where the profits were earned before January 1, 1913, and the transfer and dividend were voted December 17, 1913, and the distribution, ratably to shareholders of record on the 26th of that month, took place on January 2, 1914.
242 F. 702 reversed.
The case is stated in the opinion.
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Chicago: U.S. Supreme Court, "Syllabus," Towne v. Eisner, 245 U.S. 418 (1918) in 245 U.S. 418 245 U.S. 419–245 U.S. 424. Original Sources, accessed November 24, 2024, http://originalsources.com/Document.aspx?DocID=45VVB3AGES91WZG.
MLA: U.S. Supreme Court. "Syllabus." Towne v. Eisner, 245 U.S. 418 (1918), in 245 U.S. 418, pp. 245 U.S. 419–245 U.S. 424. Original Sources. 24 Nov. 2024. http://originalsources.com/Document.aspx?DocID=45VVB3AGES91WZG.
Harvard: U.S. Supreme Court, 'Syllabus' in Towne v. Eisner, 245 U.S. 418 (1918). cited in 1918, 245 U.S. 418, pp.245 U.S. 419–245 U.S. 424. Original Sources, retrieved 24 November 2024, from http://originalsources.com/Document.aspx?DocID=45VVB3AGES91WZG.
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