## Facts

- Howard Gould and Katherine C. Gould were formerly married.
- In 1909, a New York Supreme Court decree granted a separation “from bed and board” and ordered Howard Gould to pay Katherine Gould $3,000 per month for her support and maintenance for life.
- Katherine Gould received the court-ordered payments during 1913 and 1914.
- A tax dispute arose over whether these alimony payments constituted taxable “income” to Katherine Gould under the federal Income Tax Act of October 3, 1913.
- New York courts concluded the payments were not taxable income to Katherine Gould, and the Appellate Division affirmed.
- Howard Gould sought review in the U.S. Supreme Court by writ of error from the New York judgment.

## Issues

1. Whether monthly alimony paid under a court decree to a separated (or divorced) wife constituted taxable “net income” to the wife under the Income Tax Act of October 3, 1913.
2. Whether the 1913 Act’s broad references to “income derived from any source whatever” could be read to include alimony when alimony was not expressly identified.

## Decision

- The Supreme Court affirmed the judgment for Katherine Gould.
- The Court held that alimony paid monthly to a wife pursuant to a court decree was not taxable as “income” to her under the 1913 Income Tax Act.
- The Court reasoned that the statutory definition of taxable “net income” did not clearly include alimony, and ambiguity could not be resolved by extending the statute by implication.
- Because the statute did not specifically identify alimony as taxable, the Court declined to treat the payments received in 1913 and 1914 as part of the wife’s taxable net income.

## Legal Principles

- Taxing statutes are strictly construed: they are not extended by implication beyond the clear meaning of the words used.
- If a tax statute’s scope is reasonably doubtful, the doubt is resolved against the government and in favor of the taxpayer.
- Under the Income Tax Act of 1913, “net income” was defined by the statute’s enumerated categories of taxable gains and profits; a court-ordered support obligation was not treated as falling within those categories absent clear statutory language.
- General, catchall phrasing (such as “income derived from any source whatever”) does not, by itself, authorize taxation of a payment type not clearly embraced by the statutory scheme when the interpretive canon favoring the taxpayer applies.

## Conclusion

The Court held that court-ordered monthly alimony received under a New York separation decree was not taxable income to the recipient spouse under the 1913 federal income tax statute, applying the rule that ambiguous tax provisions are construed narrowly and in favor of the taxpayer.


Gould v. Gould, 245 U.S. 151 (1917)