Davis (plaintiff) was laid off and elected to receive severance pay. Davis made her election in November 1974. Davis’s former employer told her that it would take two months for the money to arrive. The employer sent the money earlier than expected but did not inform Davis of the earlier-than-planned arrival. A mail carrier attempted to deliver the check on December 31, 1974, but Davis was not home. Davis received the check on January 2, 1975. Davis did not include the income in her 1974 income tax return, planning instead to include it in her 1975 return. The Internal Revenue Service (IRS) (defendant) determined that Davis should have reported the income on her 1974 income tax return. Davis appealed the decision in United States Tax Court.