Rutkin v. United States

Summary

The Court held that money obtained through extortion is taxable gross income when the recipient exercises sufficient control over it to derive readily realizable economic value, even if the recipient's title could later be challenged. It also held that the jury's findings that Rutkin obtained the money by extortion and willfully omitted it from his return were supported by substantial evidence and were not open to review. Justice Black, dissenting, would have applied the prior treatment of embezzled funds and reversed because extorted money is subject to a continuing obligation of restitution and because the trial improperly expanded federal tax enforcement into local criminal conduct.