George John Killoran v. Commissioner of Internal Revenue

DUNIWAY, Circuit Judge:

We affirm a tax court decision assessing deficiency and hold that a taxi cab driver’s tips, regardless of how state law may treat them, are income for federal income tax purposes.

Appellant Killoran drove a cab in Reno, Nevada, during 1979. He stipulated in the tax court that during that year he received tips totaling $1,608.70, and that he did not report those tips on his federal income tax return. The tax court assessed a deficiency of $288 in unpaid taxes, plus $14.40 negligence penalty, and denied a motion for review. This appeal, of the tax assessment only, followed.