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cash the check until the following year. See, e.g., Frank v.
Commissioner, 22 T.C. 945 (1954), affd. per curiam 226 F.2d 600
(6th Cir. 1955); Southeastern Mail Transp., Inc. v. Commissioner,
T.C. Memo. 1987-104. Here, no such proffer was made, and
petitioner did not have a legally enforceable claim. If the KGB
had questioned petitioner’s loyalty at any time before payment,
there is no assurance that petitioner would have continued to
receive cash deliveries or payments. So long as the Soviet Union
retained the ability to withhold or control the funds, there was
no constructive receipt. Petitioner did not constructively
receive the income before it was made physically and/or
practically available to him. Accordingly, we hold that
petitioner received and failed to report income in the amounts of
$745,000, $65,000, $91,000, and $187,000 for the years 1989,
1990, 1991, and 1992, respectively.
III. Is Petitioner Liable for the Negligence Penalty?
Respondent determined that each of petitioner’s
underpayments was due to negligence or disregard of rules or
regulations. Section 6662(a) and (b)(1) provides for an
accuracy-related penalty equal to 20 percent of the portion of
the underpayment that is attributable to negligence or disregard
of rules or regulations. Petitioner must show that respondent’s
determination is erroneous. See Rule 142(a).
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