- 16 - 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 toPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011