Bogardus v. Commissioner of Internal Revenue/Dissent Brandeis

Mr. Justice BRANDEIS, Mr. Justice STONE, Mr. Justice CARDOZO, and Mr. Justice BLACK (dissenting).

A payment received as compensation for services is taxable as income, though made without consideration, and hence for many purposes a gift. Old Colony Trust Co. v. Commissioner, 279 U.S. 716, 730, 49 S.Ct. 499, 504, 73 L.Ed. 918. To hold, as the prevailing opinion seems to do, that every payment which in any aspect is a gift is perforce not compensation and hence relieved of any tax, is to work havoc with the law. A large body of decisions, whose provenance is Old Colony Trust Co. v. Commissioner, would be annulled by such a test. See e.g. Weagant v. Bowers (C.C.A.) 57 F.(2d) 679; Fisher v. Commissioner (C.C.A.) 59 F. (2d) 192; Bass v. Hawley (C.C.A.) 62 F.(2d) 721; United States v. McCormick (C.C.A.) 67 F.(2d) 867; Botchford v. Commissioner (C.C.A.) 81 F.(2d) 914, 110 A.L.R. 281; Schumacher v. United States (Ct.Cl.) 55 F.(2d) 1007. Cf. Lucas v. Ox Fibre Brush Co., 281 U.S. 115, 50 S.Ct. 273, 74 L.Ed. 733. Their teaching makes it plain that the categories of 'gift' and 'compensation' are not always mutually exclusive, but at times can overlap. What controls is not the presence or absence of consideration. What controls is the intention with which payment, however voluntary, has been made. Has it been made with the intention that services rendered in the past shall be requited more completely, though full acquittance has been given? If so, it bears a tax. Has it been made to show good will, esteem, or kindliness toward persons who happen to have served, but who are paid without thought to make requital for the service? If so, it is exempt.

We think there was a question of fact whether payment to this petitioner was made with one intention or the other. A finding either in his favor or against him would have had a fair basis in the evidence. It was for the triers of the facts to seek among competing aims or motives the ones that dominated conduct. Perhaps, if such a function had been ours, we would have drawn the inference favoring a gift. That is not enough. If there was opportunity for opposing inferences, the judgment of the Board controls. Elmhurst Cemetery Co. v. Commissioner, 300 U.S. 37, 57 S.Ct. 324, 81 L.Ed. 491; Helvering v. Tex-Penn Oil Co., 300 U.S. 481, 57 S.Ct. 569, 81 L.Ed. 755.