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was an anticipatory assignment of income, in part because the
trust had no right to supervise the taxpayer’s employment or
determine his remuneration, and the taxpayer had no legal duty to
earn money or perform services for the trust).
Petitioner argues that our conclusion conflicts with the
authorities recognizing personal service corporations (PSC’s) as
the “true earners” of the income generated by the efforts of
their shareholder/employees. We disagree.
First, we note that in many circumstances, arrangements
creating PSC’s are invalid assignments of income. See, e.g.,
Leavell v. Commissioner, 104 T.C. 140 (1995); Johnson v.
Commissioner, 78 T.C. 882, 889-890 (1982) (amounts paid by
professional basketball club for player’s services were income to
player rather than to PSC which received the payments), affd.
without published opinion 734 F.2d 20 (9th Cir. 1984). We also
note that Congress has enacted various Code provisions in an
attempt to end various perceived abuses of PSC’s. See, e.g.,
sec. 269A.
Second, the authorities recognizing PSC’s as the true
earners of the income generated by the shareholders’ services
have noted the tension between the assignment of income rule set
forth in Lucas v. Earl, 281 U.S. 111 (1930), and the importance
attributed to the corporate form by Moline Properties, Inc. v.
Commissioner, 319 U.S. 436 (1943). See, e.g., Johnson v.
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