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subject to tax on the income from such sales. Petitioners
rely on Commissioner v. Smith, 285 F.2d 91 (5th Cir. 1960),
affg. Griffin v. Commissioner, T.C. Memo. 1958-210. The
taxpayer in that case had received "over-ceiling payments"
from the purchasers of bottled whiskies. See id. at 92.
The whiskies were owned by partnerships of which the
taxpayer was a partner. See id. The Court of Appeals
affirmed the finding of this Court that the "overceiling
payments" were income to the taxpayer and not to the
partnerships. See id. at 98. Petitioners argue that the
Court of Appeals "ruled that there was no evidence
suggesting that the partnership agreement in question
'comprehended' illegal transactions or 'entitled' the
other partners 'to part of the illegal payments * * *'".
(Petitioners' brief quoting from Commissioner v. Smith,
285 F.2d, supra at 97.)
Second, petitioners argue that, even if the Court
finds that the unreported income was partnership income,
it was derived by Mr. Roberts from illegal activities,
involving the "sale of excess or non-existent quota
tobacco", and respondent has failed "to establish any
foundation linking petitioners with the underlying illegal
activity." Petitioners cite Williams v. Commissioner, 999
F.2d 760, 764 (4th Cir. 1993), affg. T.C. Memo. 1992-153;
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