Van Cleave v. United States

718 F.2d 193 (1983)

From our private database of 46,300+ case briefs, written and edited by humans—never with AI.

Van Cleave v. United States

United States Court of Appeals for the Sixth Circuit
718 F.2d 193 (1983)

SR

Facts

Eugene Van Cleave (plaintiff) was the president and majority stockholder of VanMark Corporation (VanMark). In 1969, VanMark adopted a by-law that required officers of the corporation to return any portion of their salaries deemed excessive by the Internal Revenue Service (IRS) and thereby non-deductible by VanMark. Van Cleave entered into a direct agreement with VanMark under which he agreed to return to the corporation any nondeductible portion of his future salary. In 1974, Van Cleave earned $332,000 and reported the entire salary as income for that year. In 1975, the IRS deemed $57,500 of Van Cleave’s 1974 salary to be excessive, thereby disallowing a deduction in that amount to VanMark. Pursuant to the corporation’s by-law and his own separate agreement with VanMark, Van Cleave returned $57,500 to VanMark in December 1975. On his 1975 tax return, Van Cleave relied on 26 U.S.C. § 1341 to compute his tax liability for that year. Van Cleave essentially sought to exclude the $57,500 from his 1974 income, which reduced his tax liability for that year. He then applied the reduction in his tax liability for 1974 as a credit to his 1975 tax liability. The government (defendant) disallowed Van Cleave’s reliance upon § 1341 and determined that Van Cleave was only entitled to deduct the $57,500 in 1975, the year he returned it to VanMark. The district court found in favor of the government.

Rule of Law

Issue

Holding and Reasoning (Brown, J.)

What to do next…

  1. 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 805,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.

    Unlock this case briefRead our student testimonials
  2. 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.

    Learn about our approachRead more about Quimbee

Here's why 805,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 46,300 briefs, keyed to 988 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.

Access this case brief for FREE

With a 7-day free trial membership
Here's why 805,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 46,300 briefs - keyed to 988 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership