United States v. Supplee-Biddle Hardware Co., 265 U.S. 189 (1924)

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United States v. Supplee-Biddle Hardware Company

No. 477

Argued April 9, 1924
Decided May 26, 1924
265 U.S. 189

APPEAL FROM THE COURT OF CLAIMS

Syllabus

1. The "Revenue Act of 1918" (passed February 24, 1919), in the income tax provisions applicable to corporations, adopts the definition of gross income applicable to individuals (§ 213), which excludes "the proceeds of life insurance policies paid upon the death of the insured to individual beneficiaries or to the estate of the insured." Held that there was no purpose, in the exemption, to distinguish between individual beneficiaries and corporate beneficiaries, and that the proceeds of insurance taken by a corporation on the life of an important official, to secure its financial position and indemnify itself against loss of earning power in case of his death were not taxable as income under the act. P. 194.

2. Assuming that Congress could tax proceeds of such indemnity life insurance as income, its purpose to do so should be express, in view of the popular conception of life insurance as resulting in a single addition to the resources of the beneficiary, and not in a periodical return. P. 195.

3. A construction of a war taxing act as imposing both an income and an estate tax on the proceeds of life insurance should be avoided unless required in express terms. Id.

58 Ct. Clms. 343 affirmed.

Appeal from a judgment of the Court of Claims allowing recovery of money paid under protest as an income tax.