holding that, for purposes of the assignment of income doctrine, a taxpayer has "earned" income when the all-events test for accrual of income under section 1.451-1(a), Income Tax Regs., has been satisfied
How later courts described this case
- holding that, for purposes of the assignment of income doctrine, a taxpayer has "earned" income when the all-events test for accrual of income under section 1.451-1(a), Income Tax Regs., has been satisfied
Written by the judges who cited it.
The opinion
BEGHE, J., concurring: I generally try to apply Occam’s razor to the solution of legal problems as weh as logic problems. In this case, however, I believe a two-step journey along the right-angle sides of the triangle follows a clearer path to the correct result. The path along the hypotenuse is beset with the obstacles and pitfalls of the assignment-of-income doctrine, if it isn’t led to a dead-end by the disquisition on the law of agency.
I reach the majority result in the following two steps. Even if the assignment-of-income doctrine requires petitioner to include in his gross income the amounts of the fees he earned and received from BSI after he became a partner in B&K and in SSG&M, his payments of those amounts to B&K and SSG&M, pursuant to his agreements with those firms, entitled him to equivalent concurrent deductions as ordinary and necessary business expenses under section 162(a). See Kamin, “Partners Dealing with Each Other Through Partnerships,” 46th Annual N.Y.U. Inst, on Fed. Tax 27-10 to 27-14 (1988) (example 3 and accompanying text). Those amounts thereby became partnership income distributable to all the partners, including petitioner, in accordance with the partnership agreements.
JACOBS, J., agrees with this concurring opinion.