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Cesarini v. United States of America

Cesarini v. United States of America

296 F. Supp. 3, February 17, 1969

            The case Cesarini v. United States of America holds that money found, which is tantamount to a found treasure trove, constitutes a gross income.

            Tin 1957, the Cesarinis purchased a used piano at an auction sale for an approximate amount of $15.00.  In 1964, while the piano was being cleaned, they found $4,467.00 in old currency.  Uncertain as who has out that amount in the piano, the couple decided to exchange the old currency for a new one at the bank.  They reported this amount of $4,467.00 as ordinary income in their joint income tax return.  However, the couple filed an amended income tax return, eliminating $4,467.00 from gross income.  Subsequently, they requested for a refund in the amount of $836.51, which was previously paid as tax.  The refund was denied on 1966 hence, the instant case.

             The plaintiffs claimed that the money they found does not fall under Section 61(a) as gross income.

            The court held that the money involved is part of gross income under Section 61(a) of Tax Code.  The court further asserted that previous court decisions had already recognized the broad and liberal construction

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of this particular provision on what constitutes gross income.

            In Commissioner v. Glenshaw Glass Co. (348 U.S. 426, 429, 99 L. Ed. 483, 75 S. Ct. 473, 1955), the court gave a definition of what constitute gross income.

In this case, respondent Glenshaw Glass Co. was awarded with punitive damages coming from an anti-trust law suit.  The respondent did not report such award as income.  The Internal Revenue Service filed a suit to claim taxes on the unreported income.

In the decision of the court, it defined gross income as “an undeniable accession to wealth, clearly realized, over which the taxpayer has complete dominion.”

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