## Facts

- Allen Kaiser worked for Kohler Company in Wisconsin; a union local called a strike in 1954, and Kaiser (a nonmember) joined.
- The union provided strike assistance based solely on financial need, without regard to union membership.
- Assistance consisted of weekly in-kind food vouchers (initially $6, later $7.50) and weekly payment of Kaiser’s $9 room rent.
- Kaiser did not report the value of this assistance as gross income on his federal return.
- The government assessed additional tax treating the assistance as taxable income; Kaiser paid and sued for a refund.
- At trial, a jury—under instructions focusing on the transferor’s intent and surrounding circumstances—found the assistance was a “gift” excluded from income under I.R.C. § 102(a).
- The district court entered judgment notwithstanding the verdict (JNOV) for the United States.
- The court of appeals reversed, concluding the jury’s gift finding had rational evidentiary support.

## Issues

1. Whether, on this record, the jury could properly find that union strike assistance to a needy striker was a “gift” excludable from gross income under I.R.C. § 102(a).
2. Whether a court may set aside that verdict by JNOV where the jury instructions defining “gift” were not challenged and evidence supported the verdict.

## Decision

- The Supreme Court affirmed the judgment for Kaiser.
- The Court held that, given the unchallenged jury instructions and the evidence, the jury acted within its competence in concluding the assistance was a § 102(a) gift.
- The Court treated the characterization of the transfer as a fact question and declined to substitute its judgment for the jury’s where the record supported the verdict.
- The Court did not announce a categorical rule on whether strike assistance is generally income under § 61(a) or generally excludable under § 102(a).

## Legal Principles

- Whether a transfer qualifies as a “gift” under I.R.C. § 102(a) is a fact-intensive inquiry centered on the transferor’s intent inferred from all circumstances.
- When jury instructions governing the “gift” determination are not objected to or challenged on review, they provide the operative framework for evaluating the sufficiency of the evidence.
- Appellate review of a jury’s gift determination is limited; if the verdict has rational (substantial) evidentiary support under the given charge, it should not be displaced by JNOV.
- A fact-specific verdict that particular strike assistance is a “gift” does not establish a general tax rule for all union strike benefits.

## Conclusion

The Court upheld a jury’s determination that need-based union strike assistance to a nonmember striker could be treated as a § 102(a) gift on the particular record, emphasizing that gift characterization is primarily for the fact-finder and should stand when supported by evidence under unchallenged instructions.


United States v. Kaiser, 363 U.S. 299 (1960)