*165 Decision will be entered for the respondent.
Petitioner purchased an Irish sweepstakes ticket which he gave to his niece and which was registered in the niece's name. By a collateral agreement petitioner and his wife (a resident of the Cape Verde Islands) were entitled jointly to 50 per cent of any winnings on account of the ticket. The ticket proved to be a winning ticket and approximately $ 140,000 was paid to the niece who gave to the petitioner one-half thereof. Petitioner now claims to be taxable on only one-half of this half because of the alleged right of his wife to the other half of this half. Held, the collateral agreement relating to a gambling transaction is void and unenforcible and affects taxability of receipts only when fully and specifically complied with; and held, further, petitioner has failed to prove full and specific compliance with such agreement by payment to wife of all funds to which she might be entitled thereunder.
*591 Respondent determined a deficiency in petitioner's Federal income tax for the year 1951 in the amount of $ 24,103.36. In the statement attached to the notice of deficiency this determination was explained as follows:
You were a one-half owner in a winning Sweepstakes ticket that paid $ 139,391.00. Ticket was in name of your niece, Mary G. Jardine. Only one-half (1/2) of your share of the ticket (1/4 of total) was reported based on the contention that one-half (1/2) of your half was owned by your wife, Anna Tavares, a resident of the Azores.
It is stipulated that "[the] sole issue for determination in this case is whether one-half (1/2) of the total proceeds of $ 139,391.00 won on the Irish Hospital Sweepstakes in 1951 is taxable to the petitioner in that year as respondent contends or whether petitioner is taxable on only one-fourth (1/4) of said winnings as petitioner contends."
FINDINGS OF FACT.
The*167 parties have filed a stipulation of facts. We find the facts to be as stipulated and incorporate herein by this reference the stipulation and the exhibits identified therein.
Petitioner's residence during the year 1951 was in Stoughton, Massachusetts. His occupation was cooking on a steamship. At the time of the trial herein he was employed as a cook on a tugboat in New York Harbor. He spoke and understood English with some difficulty. Petitioner's wife, Anna Tavares, was a resident and citizen of Brava, Cape Verde Islands, and was not in the United States at any time material hereto. Petitioner's niece, Mary G. Jardine, lived in Stoughton, Massachusetts.
*592 In February 1951 petitioner, who was then in New York, purchased three Irish Hospitals' Sweepstake tickets, taking one in his name, one in the name of his daughter, and one in the name of his niece, Mary G. Jardine. The last is the one here in issue and will be referred to as the ticket. For this ticket petitioner paid $ 3 and mailed it to his niece.
On or about March 21, 1951, petitioner and his niece executed before a notary public of Norfolk County, Massachusetts, three copies of the following affidavit:
Know*168 All Men By These Presents, That, We, Mary G. Jardine of Stoughton, Massachusetts and Jose Tavares of Brooklyn, New York, have purchased an Irish Sweep Stakes ticket #WM-15831.
Be it further known that ownership in said ticket is held as follows:
| Mary G. Jardine | 50% |
| Jose & Anna Tavares (jointly) | 50% |
In Witness Whereof, We have hereunto set our hands this 21st day of March A.D. 1951.
Petitioner and his niece each kept one copy and he mailed the third copy to his wife who acknowledged its receipt.
Petitioner received nothing from either his niece or his wife in consideration for any benefits which they were to receive under the agreement or arrangement evidenced by the above-quoted affidavit.
On May 26, 1951, the niece was notified by the managers of the sweepstakes (Hospitals' Trust (1940) Limited) that the ticket in her name had drawn the horse Artic Prince in the race to be run on May 30, 1951, at Epsom Downs, England, and on June 14, 1951, she was notified formally that the horse drawn by the ticket in her name had placed first in the race. The total winnings paid on this ticket amounted to $ 139,391, which amount was deposited on October 9, 1951, in a bank at Brockton, *169 Massachusetts, to the credit of account of Mary G. Jardine. As of December 31, 1951, there remained in this account the sum of $ 41,607.80 out of the total winnings of $ 139,391.
On or shortly before November 6, 1951, an employee of the collector of internal revenue for the district of Massachusetts called the attention of petitioner and his niece to the matter of Federal income taxes to be paid on these winnings, and they accordingly visited the office of the collector of internal revenue for the district of Massachusetts. Someone in that office prepared for their signatures declarations of estimated tax for the year 1951. The declaration signed by petitioner (showing his address as 324 Atlantic Avenue, Brooklyn, New York) declared his estimated tax to be $ 30,144.10, his estimated income tax withheld and to be withheld in 1951 to be $ 144.10, and his estimated tax after deducting estimated tax withheld to be $ 30,000. This last amount was paid to the collector and the declaration was filed by petitioner on November 6, 1951. On the same date the niece and her husband filed a joint declaration of estimated tax for 1951 and paid therewith the sum of $ 30,000 in income tax.
*593 *170 Sometime prior to August 22, 1952, petitioner employed an accountant named McCauley. On that date petitioner wrote the following letter to his wife Anna:
Dear Anna
I will put in bank in Joint account 16,000 Mr. Maccouly Says is yours If This way is all right for me to do Sign Name and put date on line under My name Send to me right away
Your loving husband
Jose
His wife returned the letter to petitioner with the following written under his signature:
BRAVA. CAPE VERDE ISLANDS
[Signed] Anna L Tavares
Sept 8 1952
After this letter was returned to petitioner he placed an undisclosed amount of the money which he had theretofore received from his niece in a joint bank account in the names of himself and his wife. Petitioner retained the bankbook evidencing this account. At undisclosed times subsequent to October 9, 1951, petitioner gave his wife undisclosed sums of money.
On September 16, 1952, petitioner filed an income tax return for the year 1951 with the collector of internal revenue for the district of Massachusetts (showing his address to be the same as that of his niece in Stoughton, Massachusetts), in which he reported the receipt of wages in the sum of $ 1,294.83, *171 the receipt of "SHARE OF WINNINGS IRISH SWEEP STAKES" in the sum of $ 34,847.50 (one-fourth 1 of the total winnings of $ 139,391), and a tax due in the sum of $ 16,131.59. He also showed the payment of estimated tax for that year of $ 30,141 and an overpayment of tax of $ 14,009.41.
OPINION.
The sweepstakes ticket here involved was held by and registered in the name of petitioner's niece who was recognized as its owner by the operators of the sweepstakes and received the prize money paid on account thereof. Petitioner's right to receive any part of such prize money arose out of a collateral agreement between him and his niece which was void and unenforcible. See Christian H. Droge, 35 B.T.A. 829">35 B.T.A. 829, and Samuel L. Huntington, 35 B.T.A. 835">35 B.T.A. 835, and cases therein cited. See also Babcock v. Thompson, 20 Mass. (3 Pick.) 446, 448; White v. Buss, 57 Mass. (3 Cush.) 448; Haller v. Workingmen's Co-op. Bank, 263 Mass. 37">263 Mass. 37, 160 N.E. 324">160 N.E. 324;*172 Mass. Ann. Laws, ch. 137, sec. 3. This agreement, though void and unenforcible, *594 was specifically complied with insofar as petitioner was concerned. There appears to be no question but that petitioner received from his niece one-half of the prize money called for by the collateral agreement. 2 Therefore, the niece would be taxable on only one-half of the prize money under the rule of the Droge and Huntington cases, supra.
The right, if any, of petitioner's wife to receive any part of the prize money must also be considered as arising out of the same collateral agreement with the petitioner's niece. Since this agreement was void and unenforcible, the taxable consequences of this "right" depend *173 upon whether it was "specifically complied with." See Samuel L. Huntington, supra at 838.
Thus the crucial question upon which the petitioner has the burden of proof is whether the void and unenforcible collateral agreement was "specifically complied with" as to the wife by the payment to her of the part of the prize money to which she was purportedly entitled thereunder.
Upon this question the stipulation of facts is silent and we must depend on the testimony of petitioner, including the letter of August 22, 1952, which he identified. In order to demonstrate the unsatisfactory nature of this testimony, we quote it in full as follows:
(On Cross-Examination)
Q Mr. Tavares, the money that you people won: did you send the money to Anna?
A Yes.
Q When was that?
A I send money all the time.
Q You send money all the time to your wife?
A Yes.
Q I am talking about the money that Mary Jardine got from winning the sweepstakes ticket. She put that in her bank account. Right?
A Yes.
Q So you did not send that money to your wife, did you?
A I did send it down.
Q How did you get the money out of the bank?
A After Mary give me the half of it to me, I sent it to her.
*174 Q You sent it to your wife, you say?
A Yes.
Q Mr. Tavares, I want to show you this letter here. Is this a letter you wrote to your wife? You wrote that letter to your wife?
A Yes.
Q It says, "Dear Anna, I will put in joint bank account $ 16,000." And this is dated August 22, 1952.
A Yes, after I was going home.
*595 Q This is August 22, 1952. This is more than 14 months after you won the money. Why did you wait so long to put the money in a joint bank account?
A I didn't have any intention to put it in a joint account.
Q You did not have any intention to put it in a joint bank account and then you put it in a joint bank account; is that right?
A Yes.
Q You didn't send the bank book to Anna, you kept the bank book?
A Yes.
* * * *
Q Mr. Tavares, this letter that you sent to your wife Anna on August 22, 1952, this doesn't tell her what bank the money is in, does it?
A No.
Q You had the bank book. Right?
A Yes.
(On Redirect Examination)
Q From whom did you receive this money that was to be put in the joint bank account?
A I don't remember.
Q Had you put this money in any bank account prior to that time, or was it in Mary's bank account?
A It was in Mary's bank account after *175 that.
Q In other words, you received the money from Mary?
A Yes, sir.
Q And then placed it in these bank accounts?
A Yes.
Q And you placed it in there after receipt from her?
A Yes.
We recognize that petitioner spoke and understood the English language with some difficulty. However, even though we consider this testimony with appropriate sympathy, we are only able to conclude from it that petitioner gave his wife some money at undisclosed times in undisclosed amounts, having no mathematical relationship to the amount of prize money here involved, and made a deposit of $ 16,000 in an American bank to the credit of a joint account over which he retained the exclusive use and control.
Under the facts established by the record herein, we are unable to conclude that the unenforcible collateral agreement relating to the sweepstakes ticket was specifically complied with insofar as petitioner's wife was concerned. Therefore, no "right" of the wife under such agreement can be given any taxable consequences. Petitioner received one-half of the prize money. The fact, if it be a fact, that a void and unenforcible collateral agreement provided for a further division of petitioner's receipts*176 cannot affect the taxability of petitioner's receipts to him in their full amount absent proof that there was full and specific compliance with this agreement by the payment over to the wife of all funds to which she might be entitled under the agreement.
Decision will be entered for the respondent.
Footnotes
1. Less 25 cents.↩
2. Although the affidavit refers to the "ownership" of petitioner and his wife as 50 per cent "jointly," he would have been entitled, if the agreement had been valid, to the receipt of the entire 50 per cent. See Theodore Milgroom, 31 T.C. 1256">31 T.C. 1256↩, and cases cited therein.