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B. Whether Engineering Income That Trisch Earned From 1989
Through 1993 in the Name of DRD Was Partnership Income
1. Whether Providing Engineering Services Was a
Partnership Activity
Income from personal services earned outside the scope of a
partnership is not partnership income. See Hamm v. Commissioner,
683 F.2d 1303, 1304 (10th Cir. 1982) (because the partnership
existed solely to practice law, the income from Mr. Hamm's
services as a judge was not partnership income because those
services were outside the scope of his partnership duties), affg.
T.C. Memo. 1980-154; Commissioner v. Smith, 285 F.2d 91, 96-98
(5th Cir. 1960) (receipts from whiskey sales that one partner
illegally collected without the knowledge of or benefit to the
other partners were not partnership income), affg. Griffin v.
Commissioner, T.C. Memo. 1958-210.
In Schneer v. Commissioner, 97 T.C. 643, 654-656 (1991)
(Court reviewed), we discussed Hamm v. Commissioner, supra, and
stated that the language in that opinion about the scope of a
partnership was unnecessary because the partnership had ceased to
exist before any of the income in question was earned. The issue
in Schneer was whether a law partner was personally liable for
tax on income he had earned before he assigned it to a
partnership. Although we held that the income at issue in
Schneer was partnership income, it is clear that the issue in
Hamm, Smith, Schneer, and in the instant case is whether a
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