return. Furthermore, Taft added, "The discharge by a third person of an obligation to him is equivalent to receipt by the person taxed." 279 U.S. 716 at 729. Thus, the company's payment of Wood's tax bill was the same as giving him extra income, regardless of the mode of payment. Further, the payment of taxes of Wood's behalf did not constitute a gift in the legal sense, because it was made in consideration of his services to the company, thus making the payment part of his compensation package. (This case did not change the general rule that gifts are not includable in gross income for the purposes of U.S. Federal income taxation, while some gifts but not all gifts from an employer to an employee are taxable to the employee.). Dissent Justice McReynolds wrote a brief dissent. He felt that the Court of Appeals was without jurisdiction because the Revenue Act of 1926 interfered with the executive power of the Board of Tax Appeals. Academic commentary Petitioner was essentially arguing that Federal income taxes should be tax deductible. The holding of this case is today embodied in Internal Revenue Code §275, which was added to the Code in 1964 and which specifically disallows a deduction for federal income taxes. See also List of United States Supreme Court cases, volume 279 References External links 1929 in United States case law United States Supreme Court cases United States Supreme Court cases of the Taft Court United States taxation and revenue case law American Woolen Company