Helvering v. Eubank

Holding

An insurance agent who assigns renewal commissions earned but not yet payable to another person remains taxable on those commissions when paid because they were earned through his personal services.

Facts

Eubank, a life insurance agent, terminated his agency contracts and later assigned future renewal commissions on previously written policies to assignees. He argued that the commissions paid to the assignees were not taxable to him because they had been transferred before payment.

Reasoning

Following Horst (decided the same day), the Court held that earned income may not be insulated from tax by assignment of the right to collect it. The commissions had been earned by Eubank's prior personal services, and the assignments did not shift the tax burden to the assignees.