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through embezzlement, misappropriation, and the sale of stolen
goods. James v. United States, 366 U.S. 213 (1961); Norman v.
Commissioner, 407 F.2d 1337 (3d Cir. 1969), affg. T.C. Memo.
1968-40; Naegle v. Commissioner, 378 F.2d 397 (9th Cir. 1967),
affg. T.C. Memo. 1965-212; Lydon v. Commissioner, 351 F.2d 539
(7th Cir. 1965), affg. T.C. Memo. 1964-27; Schira v.
Commissioner, 240 F.2d 672 (6th Cir. 1957), affg. T.C. Memo.
1956-35.
Respondent asserts that petitioner has unreported income for
the taxable years 1966 and 1967, in the amounts of $37,636.73 and
$148,518.66, respectively, from the sales of cars which
petitioner misappropriated from the dealership during those
years. The record shows that petitioner received at least those
net amounts. Petitioner admits to the existence of the car-sales
scheme, but alleges that the purpose of the scheme was to provide
funds to allow Caplan to keep the dealership. Petitioner admits
to using $40,000 of the proceeds, but insists that is all he
stole. However, substantial amounts of the proceeds were
deposited into a bank account over which petitioner had sole
access and control.
The "mere receipt and possession of money does not by itself
constitute taxable income." Lashells' Estate v. Commissioner,
208 F.2d 430, 435 (6th Cir. 1953), affg. in part and revg. in
part a Memorandum Opinion of this Court. Where a person collects
funds merely as an agent, the funds do not constitute income to
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