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curiam without published opinion 929 F.2d 702 (6th Cir. 1991).
Furthermore, amounts received as to which a taxpayer is acting as
an agent or conduit are not required to be reported as income.
Goodwin v. Commissioner, 73 T.C. 215, 230 (1979); see also Liddy v.
Commissioner, supra. As we stated in Diamond v. Commissioner, 56
T.C. 530, 541 (1971), affd. 492 F.2d 286 (7th Cir. 1974): "We
accept as sound law the rule that a taxpayer need not treat as
income moneys which he did not receive under a claim of right,
which were not his to keep, and which he was required to transmit
to someone else as a mere conduit."
Petitioners have the burden of proof on this issue, Rule
142(a); Welch v. Helvering, 290 U.S. 111 (1933), and resolution of
the issue depends upon our believing petitioner's explanation that
he was acting as an agent for Mr. Macias--in essence, holding Mr.
Macias' money for safekeeping--and that no portion thereof was used
for petitioners' personal benefit. Accordingly, we must distill
truth from falsehood. See Diaz v. Commissioner, 58 T.C. 560, 564
(1972).
Although the facts herein may seem improbable, we believe them
to be true. As acknowledged by respondent, this case hinges on the
credibility of the witnesses. We found Messrs. Morera, Chavez, and
petitioner to be credible witnesses. We especially found Mr.
Chavez to be trustworthy, along with the notations in his diary.
Mr. Macias' affidavit and Agent Swaffort's testimony confirm the
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