Henry Deletis, Jr. - Page 17

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          him.  Liddy v. Commissioner, 808 F.2d 312, 314 (4th Cir. 1986),             
          affg. T.C. Memo. 1985-107.  The money that a taxpayer, acting as            
          a conduit, must transmit to someone else is not income.  Diamond            
          v. Commissioner, 56 T.C. 530, 541 (1971), affd. 492 F.2d 286 (7th           
          Cir. 1974).                                                                 
               If petitioner had been holding the proceeds under Caplan's             
          direction for the benefit of the dealership, then such funds                
          would not be income to petitioner.  However, petitioner has not             
          presented any evidence as to the disposition of any of these car            
          funds in his bank account.  Petitioner's testimony that he                  
          informed Caplan of the missing $40,000 and of Weisberger's checks           
          indicates that Caplan was unaware of these items and that                   
          petitioner had great control over this scheme.  Without any                 
          evidence to support petitioner's position that he was holding the           
          proceeds as Caplan's agent or as the dealership's agent, we must            
          find that the proceeds from the illegal car sales were income to            
          petitioner.  As petitioner has not shown respondent's figures to            
          be incorrect,  we hold that the net proceeds are taxable income             
          to petitioner.                                                              
          Stables' Income                                                             
               Respondent has calculated the Stables' income for the                  
          taxable year 1967 and attributed it to petitioner as a dividend.            
          Petitioner contends that respondent has not allowed for all of              
          the Stables' expenses, that he was not an owner of the Stables by           

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