concurring.
I have no problem with my colleagues’ analysis if there is no genuine issue as to the fact — asserted by the government and denied by the taxpayers — that Dr. Kraft defrauded Blue Cross of at least $160,000. I consider it unnecessary to decide whether there is any genuine issue as to the amount of the fraud, however, because I do not believe that the Krafts come within the terms of 26 U.S.C. § 1341 in any event.
For a taxpayer to take advantage of § 1341, he must show, among other things, (1) that “an item” was included in a prior year’s gross income because of an apparent unrestricted right to the item, and (2) that it was subsequently established that the taxpayer did not have an unrestricted right to “such item” or a portion thereof. 26 U.S.C. §§ 1341(a)(1) and (a)(2). Both sections clearly speak of the same “item.”
The “item” included in the Krafts’ gross income for the prior year at issue here was not a fee received from Blue Cross; it was, rather, a salary item received by Dr. Kraft from his corporation. It has not been established that Dr. Kraft had no unrestricted right to his salary as far as the corporation is concerned, and there is no contention that Dr. Kraft ever remitted any part of his salary to the corporation. It was Dr. Kraft’s decision to use his corporation as a source of income, and on the facts of this case I can see no justification for piercing the corporate veil and pretending that there was never any corporation in the picture. I would affirm the judgment of the district court on that basis.