The United States Supreme Court has interpreted this to mean that Congress intended to exercise its full power towards taxation incomes to the extent that such taxation is permitted under Article I, Section 8, Clause 1 (the Taxing and Spending Clause) of the Constitution of the United States and under the Constitution's Sixteenth Amendment.
Section 61 lists examples of items that are taxable under the Code, including "Compensation for services, including fees, commissions, fringe benefits, and similar items"; "Gross income derived from business"; and "Gains derived from dealings in property".
Income from Compensation for services include fees, commissions, fringe benefits, and similar items.
The issue of whether indirect payments for services should be included in gross income arose again in McCann v. United States.
The company provided the travel award to the employee for good work in increasing net sales during 1972.
The court held that the travel expenses were compensation to the employee for services rendered to the company during 1972 and should be included in gross income.
Similar to McCann, the issue in United States v. Gotcher[5] involved an expense-paid trip.
As such, a taxpayer does not acquire gross income from an expense-paid trip provided by the employer when the primary and overall purpose relates to business interests.