The possibility that at some later date such a taxpayer might be required to make restitution does not cause receipts from a fraudulent or illegal activity not to be income in the year the amounts are received. Estate of Helene Simmons, 26 T.C. 409 (1956); Benes v. United States, 276 F.2d 99 (C.A. 6, 1960); and Elmer J. Benes, 42 T.C. 358, 378 (1964), affirmed per curiam 355 F.2d 929 (C.A. 6, 1966). Petitioner does not contend that McSpadden was formally obligated on any of the transactions involving third-party mortgagors, except with respect to mortgages signed by John P. Gallagher and amounts received from transactions between Superior and Pacific Finance Co. McSpadden gave his personal guarantee to John P. Gallagher with respect to certain mortgages executed by Gallagher and on February 17, 1961, gave a generally personal guarantee of Superior's indebtedness to Pacific Finance Co.

Thus, since he was acting in her behalf there might be room for an argument that the principal is chargeable with the fraud of the agent. Cf. Botwinik Brothers of Mass., Inc., 39 T.C. 988; but cf. Harold B. Franklin, 34 B.T.A. 927, 942; Estate of Helene Simmons, 26 T.C. 409; Estate of Howard T. Roe, 36 T.C. 939. Such an argument might be particularly appealing here where Donald is Georgia's sole devisee and legatee and would thus be the sole beneficiary of his own fraud, contrary to the familiar principle that a wrongdoer will not be permitted to profit by his own wrong. However, no such issue was presented to us, it being assumed by the Government that it was essential to prove Georgia's personal fraud.

See Drybrough v. Commissioner, 283 F.2d 725, remanding United Mercantile Agencies, Inc., 23 T.C. 1105 (1955). Estate of Helene Simmons, 26 T.C. 409 (1956); United Dressed Beef Co., 23 T.C. 879 (1955); Currier v. United States, 166 F. 2d 346 (C.A. 1, 1948). However, in these cases the recipients of the income were either majority shareholders or by other means controlled the corporations there involved.

At the time the withdrawals from East Flagler took place in 1949, there was not any plan or contemplation of dissolving and liquidating East Flagler; and at the time the withdrawals were made, it was intended that they were loans. Estate of Helene Simmons, 26 T.C. 409, 423, 424. Respondent has treated the 1947 withdrawal from East Flagler as a loan.