Michael K. Jones - Page 6

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            affection, respect, admiration, charity or like impulses'", or                             
            from a "'detached and disinterested generosity'," as a gift.                               
            Commissioner v. Duberstein, 363 U.S. 278, 285 (1960) (quoting                              
            Robertson v. United States, 343 U.S. 711, 714 (1952) and                                   
            Commissioner v. Lo Bue, 351 U.S. 243, 246 (1956)); Osborne v.                              
            Commissioner, T.C. Memo. 1995-71.                                                          
                  We agree with respondent that no bona fide debt existed                              
            between petitioner and the Institute.  There was no agreement of                           
            any type between them regarding repayment of the funds,                                    
            petitioner offered no security, and no interest was required or                            
            paid.  However, this does not dispose of the issue.  As the                                
            testimony made clear, the Institute served merely as a conduit to                          
            effectuate a transfer of funds from D'Souza to petitioner.  The                            
            Institute provided the funds solely upon D'Souza's request; it                             
            did not receive any services by petitioner, and it did not                                 
            acquire any publishing or royalty rights held by petitioner.  It                           
            is also clear that D'Souza intended the transfer to be either a                            
            gift or a loan to petitioner.  Under either scenario, however,                             
            the $10,000 is not taxable income to petitioner, and we need not                           
            explore the issue further.  It also follows that petitioner would                          
            not be liable for any tax on self-employment income.                                       
                  Respondent determined that petitioner was liable for an                              
            addition to tax under section 6651(a) for failure to file a                                
            return.  Section 6651(a) provides for an addition to tax in the                            
            case of a failure to file a return unless it is established that                           




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