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placed on the use of the settlement proceeds after payment by
United Ready Mixed, whether the restriction was placed on the
funds voluntarily by petitioner or through acts by petitioner’s
creditors, does not delay petitioner’s receipt of the income for
income tax purposes. See Harris v. Commissioner, 477 F.2d 812
(4th Cir. 1973) (receipt even though funds placed in escrow due
to taxpayer’s incompetency), revg. 56 T.C. 1165 (1971); Williams
v. Commissioner, 219 F.2d 523 (5th Cir. 1955) (receipt when
payments made to escrow set up by taxpayer); Sproull v.
Commissioner, 16 T.C. 244 (1951) (receipt on payment to trust),
affd. 194 F.2d 541 (6th Cir. 1952); cf. Reed v. Commissioner, 723
F.2d 138 (1st Cir. 1983) (no receipt where escrow arrangement was
bona fide deferred payment agreement between buyer and seller);
Busby v. Commissioner, 679 F.2d 48 (5th Cir. 1982) (no receipt to
seller where payment was made to buyer’s agent).
Respondent admits that at trial he conceded that petitioner
did not have receipt of the United Ready Mixed settlement
proceeds in 1992, because of the restriction placed on the funds
by petitioner’s attorney. However, in his reply brief,
respondent repudiated his concession,13 relying on Sullivan v.
13In his reply brief, respondent states:
In view of Sullivan, respondent has reexamined the
position taken at trial and on opening brief with
respect to the timing of the taxability of the Ready
Mixed settlement proceeds. Respondent is changing his
position in this case to be consistent with the holding
(continued...)
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