- 6 -
477 U.S. 317, 323 (1986); Espinoza v. Commissioner, 78 T.C. 412,
416 (1982). In deciding a motion for summary judgment, the Court
will construe factual inferences in a manner most favorable to
the opposing party. Dahlstrom v. Commissioner, 85 T.C. 812, 821
(1985).
The Supreme Court has held that gross income includes all
clearly realized accessions to wealth over which a taxpayer has
complete dominion. James v. United States, 366 U.S. 213, 219
(1961)(citing Commissioner v. Glenshaw Glass Co., 348 U.S. 426,
431 (1955)). A taxpayer has dominion and control over cash when
he or she has the freedom to use it at will, even though that
freedom may be assailable by persons with better title. Rutkin
v. United States, 343 U.S. 130, 137 (1952). In Ianniello v.
Commissioner, 98 T.C. 165 (1992), this Court stated that a
taxpayer obtains possession, custody, and control of unlawfully
acquired proceeds on the date he or she acquires such proceeds.
Thus, a taxpayer who unlawfully acquires cash receives gross
income in the taxable year that he or she unlawfully acquires the
cash, even though he or she makes restitution in a later year.3
James v. United States, supra at 219-220; Ianniello v.
Commissioner, supra at 173. Stated simply, the dominion and
3To be sure, a law-abiding taxpayer is treated no
differently. That is, a taxpayer who lawfully acquires cash
receives gross income in the taxable year that he or she lawfully
acquires the cash, even though he or she makes restitution in a
later year. Healy v. Commissioner, 345 U.S. 278 (1953); United
States v. Lewis, 340 U.S. 590 (1951).
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