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350, who paid a percentage of each fee into the BUF accounts. In
the instant case, the amounts on deposit could come from
anywhere. Thus, the receipts and deposits were not interrelated.
Petitioner’s second argument is again directed only to the
Charleston County Court account. Petitioner argues that the
deposits with the Charleston County Court were held in trust and
therefore were not income to him when received. Petitioner cites
Angelus Funeral Home v. Commissioner, 47 T.C. 391 (1967), affd.
407 F.2d 210 (9th Cir. 1969), and Miele v. Commissioner, 72 T.C.
284 (1979).
In Angelus Funeral Home, the taxpayer, which computed its
income on the accrual basis, operated a funeral home and
collected “pre-need” deposits from clients; i.e., payments for
future funeral services. The deposits were held in trust for the
sole purpose of providing the funeral services, and the taxpayer
was obligated to use the entire amount on deposit for that
purpose. See Angelus Funeral Home v. Commissioner, supra at 392-
393. The Court held that the amounts on deposit were held in
trust for the client’s benefit and were not income to the
taxpayer until the funeral services were performed. See id. at
397.
In Miele, the taxpayer, which computed its income on the
cash receipts and disbursements basis, was a law partnership that
collected prepaid legal fees. The fees were maintained in a
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