- 18 -
right, which were not his to keep, and which he was
required to transmit to someone else as a mere conduit.
See Diamond v. Commissioner, 56 T.C. 530, 541 (1971),
affd. 492 F.2d 286 (7th Cir. 1974); see also Stevens Bros.
& Miller-Hutchinson Co. v. Commissioner, 24 T.C. 953, 957
(1955); Mill v. Commissioner, 5 T.C. 691, 694 (1945);
Parker v. Commissioner, T.C. Memo. 1985-263. On the other
hand, if a taxpayer receives moneys under a claim of right
and without restriction or limitation as to the
disposition of the moneys, then the taxpayer has received
taxable income, even though it may still be claimed that he
is not entitled to retain the money, and even though he may
be liable to restore its equivalent. See North Am. Oil
Consol. v. Burnet, 286 U.S. 417, 424 (1932).
Our problem with petitioners’ conduit argument is that
the facts do not support it. Neither petitioner’s nor
Mr. Gartland’s testimony establishes a restriction or
limitation on petitioner’s use of the money received from
BMAP. There was no requirement that petitioner account to
BMAP or any other person for the funds paid by BMAP, and we
find no agreement between petitioner and BMAP restricting
petitioner’s use of the funds to purchase automobile parts
for delivery to BMAP. Neither the testimony of petitioner
nor that of Mr. Gartland establishes that petitioner
Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: May 25, 2011