What was Eisner v. Macomber?
Eisner v. Macomber was a notable tax case before the United States Supreme Court with a ruling declared in 1920. It was made notable because of a holding – pro rata stock dividend – where the income tax imposed on this dividend was unconstitutional.
Where have you heard about Eisner v. Macomber?
There have been cases like that of Eisner v. Macomber before. In 1918 there was the Towne v. Eisner case and the Pollock tax case of 1895. In the case of Eisner v. Macomber and Eisner v. Towne, the person in charge of collecting Internal Revenue was Mark Eisner.
What you need to know about Eisner v. Macomber.
When Standard Oil declared 50% of their stock dividend, Mrs Macomber, who owned 2,200 shares, received 1,100 additional shares. These were worth $20,000 and represented earnings accumulated by the company since the set date of the original tax law. The statute at the time stated the inclusion of stock dividends as income and the government stated that those certificates given to Mrs Macomber should be taxed as money, as though the company had indeed distributed the money to her. Mrs Macomber then sued Mark Eisner, who was the collector of the Internal Revenue, for a refund.
Find out more about Eisner v. Macomber.
If you are interested in the Eisner v. Macomber case, read about tax refunds.