OPINION
The sole issue is whether the award received by the petitioner in the taxable year 1959 under the Government Employees’ Incentive Awards Act constituted taxable income to him.
The petitioner contends that the award was essentially a gift and comes within the specific exclusion from gross income provided in section 74(b) of the Internal Revenue Code of 1954.3 It is his position that the award was made primarily in recognition of some achievement referred to in that section (apparently civic achievement), that he was selected without any action on his part to enter the contest or proceedings, and that he was not required .to render substantial future services as a condition to receiving the award.
The respondent, on the other hand, contends that such award constituted additional compensation for services, taxable as income under section 61(a)(1) of the Code,4 and that it is not excludable from income under tbe provisions of section 74 (b) or any other section of the Code. It is his position that the award was not made primarily in recognition of any civic or any other achievement referred to in section 74(b), but that, rather, it was made by the petitioner’s employer in recognition of achievement in connection with petitioner’s employment. The respondent cites section 1.74-1 of the Income Tax Regulations, which provides in part as follows:
Prizes and awards — (a) Inclusion in gross income. * * * Prizes and awards which are includible in gross income include (but are not limited to) amounts received from radio and television giveaway shows, door prizes, and awards in contests of all types, as well as any prizes and awards from an employer to an employee in recognition of some achievement in connection with his employment.
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(b) Exclusion from gross income. * * * Section 74(b) does not exclude prizes or awards from an employer to an employee in recognition of some achievement in connection with his employment.
There are set forth in the margin pertinent provisions of section 304 of the Government Employees’ Incentive Awards Act (5 U.S.C. sec. 2123).5 Such act authorizes the heads of various departments and agencies in the executive branch of the Federal Government to pay cash awards to civilian officers and employees of the Government who by their suggestions, superior accomplishments, or other personal efforts contribute to the efficiency, economy, or other improvement of Government operations, or who perform special acts or services in the public interest in connection with or related to their official employment.
There can be no doubt, we think, that the purpose of the Government Employees’ Incentive Awards Act is, as the name implies, to provide Government employees with an incentive to render outstanding or exceptional services to the Government. Nothing in the congressional committee reports in regard to the legislation indicates the contrary. See H. Rept. No. 1464, 83d Cong., 2d Sess.; S. Rept. No. 1992, 83d Cong., 2d Sess.; and Conf. Rept. No. 2665, 83d Cong., 2d Sess. The awards for achievement are limited, under the statute, to achievements accomplished while the recipients are in the employ of the Government, and it is also provided that the awards shall be in addition to the regular compensation of the recipients.
The award in question was given to the petitioner by GSA, with the approval of the Civil Service Commission, in recognition of superior accomplishment in the advocacy, initiation, development, analysis, preparation, and successful prosecution of actions resulting in large savings to the Federal Government, as pointed out in the Findings of Fact. There can be no question that the award was in recognition of achievements of the petitioner in connection with, and as a part of, his employment as assistant general counsel of GSA and as chairman and executive director of the SAGE task force. We think the award must be considered as additional compensation for services rendered to the GSA and that, as such, it is taxable under the provisions of section 61(a)(1) of the Code.
The award here involved falls directly within the provision of the regulations which states that the exclusion provided by section 74(b) does not encompass prizes or awards from an employer to an employee in recognition of some achievement in connection with his employment. The petitioner, however, contends, in effect, that in this respect the regulation is not a valid interpretation of section 74(b). He points out that section 74(b) provides a basic and two subsidiary tests for determining whether certain prizes and awards are excludable from income, and that none of these suggests a legislative intent to apply a broad general principle that under no circumstances can a payment by an employer to an employee come within the exclusion.
We do not read the regulations in question as setting forth the broad principle that under no circumstances can a payment by an employer to an employee come within the exclusion. Rather, such regulations provide that there can be no exclusion under section 74(b) where a prize or an award is given by an employer to an employee in recognition of some achievement in connection with his employment. Actually, the congressional committee reports in connection with the enactment of section 74 of the 1954 Code (H. Rept. No. 1337, 83d Cong., 2d Sess., p. A27, and S. Rept. No. 1622, 83d Cong., 2d Sess., p. 179) specifically state that section 74(b) was not intended to exclude from income prizes or awards from an employer to an employee in recognition of some achievement in connection with his employment.6 The petitioner contends that the quoted language is not contained in the committee reports, but in a technical analysis appended to the reports. The petitioner is in error. The technical analyses are integral parts of the reports. The petitioner takes the position that, in any event, the language of section 74 is clear and unambiguous and contends, in effect, that resort cannot be had to the committee reports in interpreting it. It has been held, however, that there is no rule of law forbidding resort to explanatory legislative history no matter how “clear the words may appear on ‘superficial examination.’ ” Harrison v. Northern Trust Co., 317 U.S. 476. See also Max Carasso, 34 T.C. 1139, affd. (C.A. 2) 292 F. 2d 367, certiorari denied 369 U.S. 874, and other cases cited therein. The regulations are in accord with the intent of Congress as evidenced by the committee reports. Since they are not unreasonable or inconsistent with the intent of the statute, they must be sustained. Commissioner v. South Texas Lumber Co., 333 U.S. 496.
It is our conclusion that the award here in question does not come within the exception provided in section 74(b).7 Whether, as the regulations appear to contemplate, it is taxable by virtue of the provisions of section 74(a) which state the general rule that gross income includes amounts received as prizes and awards, we need not here decide8
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OPINION
The sole issue is whether the award received by the petitioner in the taxable year 1959 under the Government Employees’ Incentive Awards Act constituted taxable income to him.
The petitioner contends that the award was essentially a gift and comes within the specific exclusion from gross income provided in section 74(b) of the Internal Revenue Code of 1954.3 It is his position that the award was made primarily in recognition of some achievement referred to in that section (apparently civic achievement), that he was selected without any action on his part to enter the contest or proceedings, and that he was not required .to render substantial future services as a condition to receiving the award.
The respondent, on the other hand, contends that such award constituted additional compensation for services, taxable as income under section 61(a)(1) of the Code,4 and that it is not excludable from income under tbe provisions of section 74 (b) or any other section of the Code. It is his position that the award was not made primarily in recognition of any civic or any other achievement referred to in section 74(b), but that, rather, it was made by the petitioner’s employer in recognition of achievement in connection with petitioner’s employment. The respondent cites section 1.74-1 of the Income Tax Regulations, which provides in part as follows:
Prizes and awards — (a) Inclusion in gross income. * * * Prizes and awards which are includible in gross income include (but are not limited to) amounts received from radio and television giveaway shows, door prizes, and awards in contests of all types, as well as any prizes and awards from an employer to an employee in recognition of some achievement in connection with his employment.
*******
(b) Exclusion from gross income. * * * Section 74(b) does not exclude prizes or awards from an employer to an employee in recognition of some achievement in connection with his employment.
There are set forth in the margin pertinent provisions of section 304 of the Government Employees’ Incentive Awards Act (5 U.S.C. sec. 2123).5 Such act authorizes the heads of various departments and agencies in the executive branch of the Federal Government to pay cash awards to civilian officers and employees of the Government who by their suggestions, superior accomplishments, or other personal efforts contribute to the efficiency, economy, or other improvement of Government operations, or who perform special acts or services in the public interest in connection with or related to their official employment.
There can be no doubt, we think, that the purpose of the Government Employees’ Incentive Awards Act is, as the name implies, to provide Government employees with an incentive to render outstanding or exceptional services to the Government. Nothing in the congressional committee reports in regard to the legislation indicates the contrary. See H. Rept. No. 1464, 83d Cong., 2d Sess.; S. Rept. No. 1992, 83d Cong., 2d Sess.; and Conf. Rept. No. 2665, 83d Cong., 2d Sess. The awards for achievement are limited, under the statute, to achievements accomplished while the recipients are in the employ of the Government, and it is also provided that the awards shall be in addition to the regular compensation of the recipients.
The award in question was given to the petitioner by GSA, with the approval of the Civil Service Commission, in recognition of superior accomplishment in the advocacy, initiation, development, analysis, preparation, and successful prosecution of actions resulting in large savings to the Federal Government, as pointed out in the Findings of Fact. There can be no question that the award was in recognition of achievements of the petitioner in connection with, and as a part of, his employment as assistant general counsel of GSA and as chairman and executive director of the SAGE task force. We think the award must be considered as additional compensation for services rendered to the GSA and that, as such, it is taxable under the provisions of section 61(a)(1) of the Code.
The award here involved falls directly within the provision of the regulations which states that the exclusion provided by section 74(b) does not encompass prizes or awards from an employer to an employee in recognition of some achievement in connection with his employment. The petitioner, however, contends, in effect, that in this respect the regulation is not a valid interpretation of section 74(b). He points out that section 74(b) provides a basic and two subsidiary tests for determining whether certain prizes and awards are excludable from income, and that none of these suggests a legislative intent to apply a broad general principle that under no circumstances can a payment by an employer to an employee come within the exclusion.
We do not read the regulations in question as setting forth the broad principle that under no circumstances can a payment by an employer to an employee come within the exclusion. Rather, such regulations provide that there can be no exclusion under section 74(b) where a prize or an award is given by an employer to an employee in recognition of some achievement in connection with his employment. Actually, the congressional committee reports in connection with the enactment of section 74 of the 1954 Code (H. Rept. No. 1337, 83d Cong., 2d Sess., p. A27, and S. Rept. No. 1622, 83d Cong., 2d Sess., p. 179) specifically state that section 74(b) was not intended to exclude from income prizes or awards from an employer to an employee in recognition of some achievement in connection with his employment.6 The petitioner contends that the quoted language is not contained in the committee reports, but in a technical analysis appended to the reports. The petitioner is in error. The technical analyses are integral parts of the reports. The petitioner takes the position that, in any event, the language of section 74 is clear and unambiguous and contends, in effect, that resort cannot be had to the committee reports in interpreting it. It has been held, however, that there is no rule of law forbidding resort to explanatory legislative history no matter how “clear the words may appear on ‘superficial examination.’ ” Harrison v. Northern Trust Co., 317 U.S. 476. See also Max Carasso, 34 T.C. 1139, affd. (C.A. 2) 292 F. 2d 367, certiorari denied 369 U.S. 874, and other cases cited therein. The regulations are in accord with the intent of Congress as evidenced by the committee reports. Since they are not unreasonable or inconsistent with the intent of the statute, they must be sustained. Commissioner v. South Texas Lumber Co., 333 U.S. 496.
It is our conclusion that the award here in question does not come within the exception provided in section 74(b).7 Whether, as the regulations appear to contemplate, it is taxable by virtue of the provisions of section 74(a) which state the general rule that gross income includes amounts received as prizes and awards, we need not here decide8 since, as indicated above, we think that the award constitutes compensation and hence is taxable income under the provisions of section 61(a)(1) of the Code.
The petitioner, while apparently not specifically relying upon the provisions of section 102(a),9 does state on brief that the award in question is in the nature of a gift. He states that the courts, including the Supreme Court in Commissioner v. Duberstein, 868 U.S. 278, have refused to adopt a position that under no circumstances can there be a gift from an employer to an employee and that in all instances the amount received is taxable as compensation. However, in the Duberstein case it was stated that a gift in the statutory sense proceeds from a detached and disinterested generosity and out of affection, respect, admiration, charity, or like impulses, and that the most critical consideration is the transferor’s intention. We think it clear that awards made under the Government Employees’ Incentive Awards Act are not generated by the impulses alluded to by the Supreme Court, but are intended as compensation for exceptional services rendered to the Federal Government. Accordingly, the award is not excludable from income as a gift under section 102(a) of the Code. Nor is there any other provision of the Code under which it would be excludable. It may be added that the Government Employees’ Incentive Awards Act itself contains no provision exempting the awards from tax.
In the recent case of Griggs v. United States, (Ct. Cl.) 314 F. 2d 515, the same conclusion was reached with respect to an award given under the Government Employees’ Incentive Awards Act to the taxpayer, who was a transportation and freight specialist employed by the Department of Defense. The Court of Claims concluded, among other things, that the award was in reality compensation for special services rendered.
The respondent did not err in including the award in question in the petitioner’s taxable income.
Decision will be entered for the respondent.