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A Question of Legality Post your legal questions here (general, nothing of a personal nature)

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Old 02-12-2013, 05:34 AM   #1
frontman667
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Join Date: Oct 31, 2012
Location: Sacramento, CA
Posts: 100
Talking Fed Court Rule Sugar Babies' Income is tax exempt!!

Sugar Babies are considered mistresses.

942 F.2d 1125

68 A.F.T.R.2d 91-5482, 91-2 USTC P 50,433,
33 Fed. R. Evid. Serv. 967

UNITED STATES of America, Plaintiff-Appellee,
v.
Lynnette HARRIS and Leigh Ann Conley, Defendants-Appellants.

Nos. 90-2721, 90-2974.
United States Court of Appeals,
Seventh Circuit.

Argued May 9, 1991.
Decided Aug. 30, 1991.


https://bulk.resource.org/courts.gov/c/F2/942/942.F2d.1125.90-2974.90-2721.html


"
The Tax Court did find that payments were income to the women who received them in Blevins v. Commissioner, T.C. Memo 1955-211, and in Jones v. Commissioner, T.C. Memo 1977-329. But in Blevins, the taxpayer was a woman who practiced prostitution and "used her home to operate a house of prostitution" in which six other women worked. Nothing suggested that the money at issue in that case was anything other than payments in the normal course of her business. Similarly in Jones, a woman had frequent hotel meetings with a married man, and on "each occasion" he gave her cash. (emphasis added). Here too, the Tax Court found that the relationship was one of prostitution, a point that was supported by the woman's similar relationships with other men.

31
If these cases make a rule of law, it is that a person is entitled to treat cash and property received from a lover as gifts, as long as the relationship consists of something more than specific payments for specific sessions of sex. What's more, even in Blevins, in which the relationship was one of raw prostitution, the Tax Court rejected the IRS' claim that a civil fraud penalty should be imposed. Nor was a fraud penalty applied in Jones, the other prostitution case, although there the issue apparently was not raised. The United States does not allege that Harris received specific payments for specific sessions of sex, so Reis, Libby, and Starks support Harris' position.
"

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