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societies". Further, on brief, petitioners assert that "Churches
that are not [section] 501C3 are not under IRS regulation code".
Respondent determined that petitioners are liable for tax on
their income from landscaping services.
Petitioners earned income from landscaping services during
the years in issue. Petitioners assigned the income they earned
to Mountlake. Respondent determined that the income derived from
landscaping services must be included in petitioners' income
pursuant to section 61. Section 61(a) provides that, except as
otherwise provided by law, gross income includes income from
whatever source derived, including compensation for services.
See sec. 61(a)(1).
It is fundamental to our system of taxation that income must
be taxed to the one who earns it. See Commissioner v.
Culbertson, 337 U.S. 733, 739-740 (1949). This has been
described as "the first principle of taxation". Id. at 739. The
question of who should be taxed depends on which person or entity
in fact controls the earning of the income rather than who
ultimately receives the income. See Commissioner v. Sunnen, 333
U.S. 591, 604-606 (1948); Corliss v. Bowers, 281 U.S. 376, 378
(1930); Vercio v. Commissioner, 73 T.C. 1246, 1253 (1980); see
also Ronan State Bank v. Commissioner, 62 T.C. 27, 35 (1974);
American Sav. Bank v. Commissioner, 56 T.C. 828 (1971); Nat
Harrison Associates, Inc. v. Commissioner, 42 T.C. 601 (1964). A
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