*181 Decision will be entered for the respondent.
Honorarium received by petitioner from Louisiana State Law Institute constitutes taxable income within the meaning of section 22 (a) of the Internal Revenue Code.
*201 This proceeding is brought to test the correctness of respondent's action in determining a deficiency in the petitioners' individual income tax for the taxable year 1948 in the amount of $ 196.58.
The sole issue herein is whether the sum of $ 1,000 received by the petitioner Leon D. Hubert, Jr., from the Louisiana State Law Institute during the taxable year 1948 is taxable income within the meaning of section 22 (a) *182 of the Internal Revenue Code, or whether it is a gift within the meaning of section 22 (b) (3).
FINDINGS OF FACT.
Petitioners Leon D. Hubert, Jr., and May B. Hubert are husband and wife, and residents of the City of New Orleans, Parish of Orleans, within the collection district of Louisiana. The joint return of petitioners was filed with the collector of internal revenue for the district of Louisiana at New Orleans. Leon D. Hubert, Jr. (hereinafter referred to as the petitioner), is a licensed attorney of Louisiana, having received his A. B. and LL. B. degrees from Tulane University in 1931 and 1934, respectively. With the exception of 3 1/2 years in the military service, petitioner served as an assistant United States attorney for the eastern district of Louisiana, New Orleans, Louisiana, from November 1934 to June 1946, handling both criminal and civil cases, including criminal income tax prosecution. In June 1946, petitioner resigned his position as assistant United States attorney to accept appointment as an associate professor of law at Tulane University and held that position throughout the period in question.
The Louisiana State Law Institute is an organization created *183 by the Louisiana State Legislature in 1938, its purpose being generally to conduct studies and make recommendations relating to the clarification, simplification, and revision of the laws of Louisiana. The expenditures of the Louisiana State Law Institute are made from appropriations of the Louisiana State Legislature. From 1938 to 1942, petitioner served the institute as an adviser, working on a model *202 criminal code which was ultimately enacted as the Criminal Code of Louisiana of 1942. Petitioner received no funds from the institute during that period. After becoming an associate professor of law at Tulane University in 1946, petitioner was appointed by the dean of the College of Law as a reporter and council member of the institute representing Tulane University. Thereafter, petitioner, working with other reporters and council members, prepared a state civil code which was ultimately enacted by the legislature as the Louisiana Revised Statutes of 1950. During 1948, petitioner received from the Louisiana State Law Institute a total of $ 1,000 in the form of quarterly checks in the amount of $ 250. No income tax was withheld by the institute.
Throughout the period *184 1946 to 1948, inclusive, petitioner and other reporters were furnished full time research assistants. The institute paid the assistants $ 3,000 to $ 3,600 per year. While disclosing the receipt of the $ 1,000 in a schedule attached to his income tax return, petitioner did not include that amount in his taxable income for 1948. The foreword to the handbook of the Louisiana State Law Institute states in part:
Its funds are expended in the employment of research and clerical assistants, in the payment of nominal honoraria to the reporters who accept the responsibility for the preparation of its studies and recommendations * * *.
The Louisiana Revised Statutes of 1950, title 24, chapter 4, section 203, provide as follows:
Plans of membership; compensation of members of council.
The council and other persons of the Louisiana State Law Institute are empowered to adopt a plan or plans of membership so designed as to encourage and invite the cooperation of all members of the legal profession in the work of the Institute. The members of the council shall serve without any compensation for services as such. However, the council may fix and pay reasonable compensation to the director*185 of the Institute, and honoraria to members of the council who perform professional service for the Institute, authorized by the council of the Institute. Such employment or payment shall not be deemed a violation of any criminal law punishing the holder of more than one public office or employment in Louisiana.
The value of the serivces rendered by petitioner substantially exceeds the amount of the payment made. The institute has adopted the practice of granting to each of the reporters an amount fixed uniformly at $ 1,000 per calendar year. Petitioner had received like sums from the institute in the years 1946 and 1947 and had treated them in the same manner in his tax returns as in 1948.
OPINION.
It is clear that petitioner rendered valuable services in the taxable year 1948 to the Louisiana State Law Institute. *203 It is equally clear that the $ 1,000 received by petitioner in that year from the institute was paid to him by reason of the fact that he had rendered such services. We hardly need the citation of authority at this late date to establish that compensation for personal services constitutes taxable income within the meaning of section 22 of the Internal Revenue*186 Code. As so aptly stated by Mr. Justice Holmes in Irwin v. Gavit, 268 U.S. 161">268 U.S. 161, 166, (a case in which the Court rejected the contention that certain payments there involved did not constitute income):
If these payments properly may be called income by the common understanding of that word and the statute has failed to hit them it has missed so much of the general purpose that it expresses at the start. Congress intended to use its power to the full extent. Eisner v. Macomber, 252 U.S. 189">252 U.S. 189, 203.
But, petitioner contends that the $ 1,000 payment constitutes a gift specifically excludible under section 22 (b) (3) of the Code. In considering this contention, it is well to bear in mind that the money paid to petitioner was in accordance with a uniform practice of the institute to pay a fixed sum annually, in quarterly installments, to all of its reporters. These payments are admittedly made to the reporters as a class because they are called upon to perform an unusual amount of work and give a good deal of their time. Petitioner had received identical sums in 1946 and 1947 and could anticipate that amount each*187 year he served so long as the institute's policy remained unchanged. The conclusion is inescapable that it was the intention of the institute to at least partially compensate the reporters by the payments made. The fact that the sum paid was inadequate reward considering the value of the services performed, does not negate the intention of the institute to compensate the reporters.
Petitioners rely heavily on the contention that the Louisiana State Law Institute was under no obligation, legal or otherwise, to make any payment to petitioner. Even so, it is now settled law that a payment may be compensation for services rendered although made voluntarily and without legal obligation. Willkie v. Commissioner, 127 F. 2d 953, certiorari denied 317 U.S. 659">317 U.S. 659, Old Colony Trust Co. v. Commissioner, 279 U.S. 716">279 U.S. 716. In Bogardus v. Commissioner, 302 U.S. 34">302 U.S. 34, the recipient of the payment had rendered no service to the payor company.
It is our opinion that the payment in question constituted compensation for professional services rendered by petitioner and is includible*188 in his gross income under section 22 (a) of the Internal Revenue Code. The deficiency as determined by the respondent must stand.
Decision will be entered for the respondent.