A lower court had ordered the Internal Revenue Service (IRS) to issue a refund to man who, after other litigation found his bonus to have been miscalculated, was forced to return some of his income from a previous year to his former employer.

[6] The Court observed that in North American Oil, the plaintiff was ultimately allowed to keep the money in question, and so it was not unfair for the government to keep the taxes that were paid.

[2][5][6] In an 8–1 decision, the Supreme Court reversed, ruling that the claim of right doctrine from North American Oil applied to situations like Mr.

We see no reason why the Court should depart from this well-settled interpretation merely because it results in an advantage or disadvantage to a taxpayer.Justice Douglas wrote in dissent that it would be both simpler and more fair to allow taxpayers in Lewis' situation to ask for a refund.

[1] The claim of right doctrine did not leave taxpayers like Lewis completely at a loss, since they would be "entitled to a deduction" in the year they were ordered to repay former earnings.