George

I. Background

This case presents two key issues: First, are receivership1 1 “A receiver is a court officer or representative appointed to take over the control and management of property that is the subject of litigation 11242 UNITED STATES v. GEORGE fees paid to a cash-basis taxpayer taxable in the year received even though they are subject to subsequent court review and possible disgorgement? Assuming they are, was the law on this point sufficiently clear to allow a criminal prosecution of George for failure to report this income? We answer both questions in the affirmative.

During 1991, 1992, and 1993, George was affiliated with Media Venture Partnership, which brokered the sale of radio stations and, through its affiliate Media Venture Management, Inc., handled court-appointed receiverships for financially troubled radio stations being sold off to satisfy debts owed to the stations’ creditors. Because corporations cannot serve as court-appointed receivers, George, a cash-basis taxpayer, was appointed in his individual capacity to serve as the receiver. George’s receiver fees, which were negotiated with the inter- ested parties and approved by the court at…