Ouan Bland - Page 10

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          sound law the rule that a taxpayer need not treat as income                 
          moneys which he did not receive under a claim of right, which               
          were not his to keep, and which he was required to transmit to              
          someone else as a mere conduit.”  See also Ancira v.                        
          Commissioner, 119 T.C. 135, 138 (2002).                                     
               Money received as a mere agent or conduit is not includable            
          in gross income.  Liddy v. Commissioner, 808 F.2d at 314; Diamond           
          v. Commissioner, supra at 541; Heminway v. Commissioner, 44 T.C.            
          96, 101 (1965).                                                             
               The Court finds credible the testimony of both petitioner              
          and Mr. Fullen that the compensation earned actually belongs to             
          Mr. Fullen.  The Court holds the nonemployee compensation is not            
          attributable to petitioner and she is not liable for self-                  
          employment tax.                                                             
               In the Joint Motion for Continuance, respondent expressed              
          his intention to issue a notice of deficiency to Mr. Fullen for             
          the nonemployee compensation in issue.  Mr. Fullen has already              
          provided respondent with his Social Security number and has                 
          claimed full responsibility for the taxes owed on the                       
          compensation.  Mr. Fullen’s failure to file an individual income            
          tax return for 1998 does not impair respondent’s ability to issue           
          a notice of deficiency to him.  The open period of limitations              
          serves as an aid in respondent’s pursuit of Mr. Fullen for this             

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