AJF Transportation Consultants, Inc., et al. - Page 17

                                                    - 17 -17                                                      

                    Generally, "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."  Diamond v. Commissioner, 56 T.C. 530, 541 (1971),                                    
             affd. 492 F.2d 286 (7th Cir. 1974).  No tax is imposed upon the                                      
             receipt of money in a fiduciary or agency capacity.  Stone v.                                        
             Commissioner, 865 F.2d 342, 343 (D.C. Cir. 1989); Heminway v.                                        
             Commissioner, 44 T.C. 96, 101 (1965).  However, where a                                              
             shareholder uses corporate property for his personal benefit, not                                    
             proximately related to corporate business, the shareholder must                                      
             include the value of the benefit in income as constructive                                           
             dividends to the extent of the corporation's earnings and                                            
             profits.  DiZenzo v. Commissioner, 348 F.2d 122, 125 (2d Cir.                                        
             1965), revg. in part and remanding for additional findings to                                        
             support the Tax Court's holding, T.C. Memo. 1964-121, remanding                                      
             T.C. Memo. 1966-16; Truesdell v. Commissioner, 89 T.C. 1280, 1294                                    
             (1987); Falsetti v. Commissioner, 85 T.C. 332, 356 (1985).                                           
                    Ferrentino argues that he used the check proceeds to pay for                                  
             "casual labor" needs of AJF during certain peak times or when                                        
             additional help was needed.  Respondent counters that any                                            
             additional labor needs of AJF were satisfied by the use of leased                                    
             helpers from Manpower Services.                                                                      








Page:  Previous  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  Next

Last modified: May 25, 2011