-353-
Respondent maintains that the portions of the bonus payments
that eventually made their way to THC represent income taxable to
Kanter under the assignment of income doctrine. See Lucas v.
Earl, 281 U.S. 111 (1930). Respondent argues (1) the bonus
payments were not paid for the use of funds but were used as a
means to divert funds from Shelburne and Century to CMS
Investors’ partners, and (2) the bonus payments represented
income earned by the individual partners of the Levenfeld/Kanter
law partnership “through their actions in creating the right to
receive the bonus payments and diverting them to their respective
family entities.” Respondent’s Opening Brief at 927.
Respondent’s position apparently is based on the Court’s
finding in Durkin v. Commissioner, supra, that the Shelburne
bonus payment to Delta was not made for the use of money but was
a mechanism to divert funds to CMS Investors and the various
entities established for the benefit of the Levenfeld/Kanter law
partners and/or their immediate families. Respondent argues
there was no need for the loans to Shelburne and Century because
Shelburne and Century would, in due course, realize funds from
movie revenues that would alleviate the need for such financing.
Therefore, respondent asserts, the loans were structured merely
to create purported payments of interest which were, in effect,
payments to Kanter and his law firm for legal services the firm
provided in connection with movie syndications.
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