348 U.S. 426 (1955)
This litigation involves two cases with independent factual backgrounds yet presenting the identical issue. The two cases were consolidated for argument before the Court of Appeals for the Third Circuit and were heard en banc.1 The facts of the cases were largely stipulated and are not in dispute.2
The Glenshaw Glass Company, a Pennsylvania corporation, manufactures glass bottles and containers. It was engaged in protracted litigation with the Hartford-Empire Company, which manufactures machinery of a character used by Glenshaw.3 In December, 1947, the parties concluded a settlement of all pending litigation, by which Hartford paid Glenshaw approximately $800,000. Of the total settlement, $324,529.94 represented payment of punitive damages for fraud and antitrust violations.4 Glenshaw did not report this portion of the settlement as income for the tax year involved. The Commissioner determined a deficiency claiming as taxable the entire sum less only deductible legal fees.5
William Goldman Theatres, Inc., a Delaware corporation operating motion picture houses in Pennsylvania, sued Loew’s, Inc., alleging a violation of the federal antitrust laws and seeking treble damages. After a holding that a violation had occurred, the case was remanded to the trial court for a determination of damages.6 It was found that Goldman had suffered a loss of profits equal to $125,000 and was entitled to treble damages in the sum of $375,000. Goldman reported only $125,000 of the recovery as gross income and claimed that the $250,000 balance constituted punitive damages.7
The Tax Court ruled separately in favor of each taxpayer. In a single opinion, the Court of Appeals affirmed the Tax Court’s rulings.8 Because of the frequent recurrence of the question and differing interpretations by the lower courts of this Court’s decisions bearing upon the problem, the Supreme Court granted the Commissioner of Internal Revenue’s petition for certiorari.9
Whether money received as exemplary damages for fraud, or as the punitive two-thirds portion of a treble-damage antitrust recovery, must be reported by a taxpayer as gross income under § 22 (a) of the Internal Revenue Code of 1939?10
Section 22(a) of the Internal Revenue Code of 1939 provides that gross income includes gains, profits, and income derived from salaries, wages, or compensation for personal service of whatever kind and in whatever form paid or from professions, vocations, trades, businesses, commerce, or sales, or dealings in property, whether real or personal, growing out of the ownership or use of or interest in such property; also from interest, rent, dividends, securities, or the transaction of any business carried on for gain or profit, or gains or profits and income derived from any source whatever.11 Congress used this language to exert the full measure of its taxing power. The Court has given a liberal construction to this broad phraseology in recognition of the intention of Congress to tax all gains except those specifically exempted.12
Yes. The payments in question constitute undeniable accessions to wealth clearly realized and over which the taxpayers have complete dominion.13 In the Glenshaw Glass case the $324,529.94 punitive damages for fraud and antitrust violations were an accession to wealth that the taxpayer had complete dominion over after the settlement. In the Goldman Theatres case the $250,000 punitive portion of the treble damages recovery likewise represented a realized gain over which the taxpayer exercised complete dominion.
The mere fact that the payments were extracted from the wrongdoers as punishment for unlawful conduct cannot detract from their character as taxable income to the recipients.14 It would be an anomaly that could not be justified in the absence of clear congressional intent. A recovery for actual damages is taxable but not the additional amount extracted as punishment for the same conduct which caused the injury would create an unjustifiable distinction.15
The money received as exemplary damages for fraud, or as the punitive two-thirds portion of a treble-damage antitrust recovery, must be reported by a taxpayer as gross income under § 22 (a) of the Internal Revenue Code of 1939.16
Related opinions on this issue
Mr. Justice Douglas dissents.17