- 6 -
income, but, petitioner claims, those amounts are not includable
in his income because he received the underlying funds as a “mere
conduit” for the Zachova entities’ payment of bribes to Cooper.
Petitioner relies primarily on this Court’s memorandum opinions
in Estate of Kalichuk v. Commissioner, T.C. Memo. 1964-336, Smith
v. Commissioner, T.C. Memo. 1964-274, and Pew v. Commissioner,
T.C. Memo. 1961-264. In Kalichuk, we held that money received by
a corporation’s shareholders was not taxable to them as a
dividend because the owners immediately paid that money to public
officials to secure work contracts for the corporation. We
concluded in Kalichuk that the owners received the money as “mere
conduits” for payment to the public officials. In Smith, we held
similarly as to money received by a corporation’s shareholder
which he distributed to third parties as gifts or gratuities on
behalf of the corporation. We noted in Smith that the taxpayer
kept none of the money for his personal benefit. In Pew, we held
that a taxpayer’s gross income did not include money paid to his
client’s agent as kickbacks. The money passed through the
taxpayer’s hands in that the taxpayer billed his client for (and
received from him payment for) the value of his services, plus an
additional amount which represented the kickback, and the
taxpayer returned the kickbacks to the agent.
We agree with petitioner that this Court’s jurisprudence
excludes from his gross income the amount of the bribes which he
Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011