Commissioner v. Indianapolis Power & Light Company
United States Supreme Court
493 U.S. 203 (1990)
Indianapolis Power & Light Company (IPL) (plaintiff) required customers with poor credit to make monetary deposits, thereby ensuring their payment of future IPL electric bills. IPL would refund the deposit if the customer chose not to use IPL’s electricity or met other specified conditions. IPL paid the customer interest on the deposit. However, IPL did not report deposits as gross income. The commissioner of the Internal Revenue Service (defendant) issued a deficiency notice, finding that the deposits were gross income because they were advance payments to IPL for electricity service. IPL disagreed, reasoning that a deposit was a loan that IPL would repay if the customer met one of the specified conditions for receiving a refund. IPL petitioned the United States Tax Court for a redetermination, and the tax court held for IPL. The United States Court of Appeals for the Seventh Circuit affirmed. The United States Supreme Court granted certiorari on the issue because the Seventh and Eleventh Circuits disagreed as to the appropriate test for determining whether a deposit constitutes gross income.
Rule of Law
Holding and Reasoning (Blackmun, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.
Here's why 174,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 14,000 briefs, keyed to 188 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.