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signed by petitioner reflected that in 2000 she was a 95-percent
member, respondent correctly attributed 95 percent of Miroyal’s
$55,408.51 of ordinary income for that year (i.e., $52,638) to
petitioner.
E. Speck and National Land Bank Income
1. Taxable Year 199914
a. Income From Speck
A fundamental principle of tax law is that income is taxed
to the person who earns it. See Commissioner v. Culbertson, 337
U.S. 733, 739-740 (1949); Lucas v. Earl, 281 U.S. 111, 114-115
(1930).
“Attempts to subvert * * * [the fundamental principle
that income is taxed to the person who earns it] by
diverting income away from its true earner to another
entity by means of contractual arrangements, however
cleverly drafted, are not recognized as dispositive for
Federal income tax purposes, regardless of whether such
arrangements are otherwise valid under State law.”
[Residential Mgmt. Servs. Trust v. Commissioner, T.C.
Memo. 2001-297 (quoting Barmes v. Commissioner, T.C.
Memo. 2001-155).]
Under the assignment of income doctrine, gross income from
personal services must be included in the income of the person
who earned it. Lucas v. Earl, supra at 114. Such income is
taxable to the person who earned it even though the taxpayer
makes an anticipatory assignment of income and delivers a payor’s
14 With respect to National Land Bank income for 1999, see
supra note 2.
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