Rev. Rul. 58-220

It is the rule of employment, under which physicians are appointed on a full-time salary basis to the staff of a certain hospital, that such physicians shall receive no fees or compensation for their individual benefit from or on behalf of any patients admitted to the hospital. In some instances, the patients insist on making checks for the services rendered pyable directly to the physician instead of to the hospital. The hospital, and not the physicians, actually bills all patients treated. In line with the above condition of their employment, the physicians endorse the checks and turn them over to the hospital. The fees so received are used entirely in the operation of the hospital. Held , where, under the above circumstances, checks are received by a physician and are immediately endorsed to the hospital, the physician is not required to include the amounts thereof in his gross income. He is an agent for the hospital, merely acting as a conduit for the fees collected. See L. A. Menaux et ux. v. Commissioner , 38 B.T.A. 200, for a similar holding with respect to poll tax and political contributions collected and remitted by the petitioner, acquiescence, C.B. 1939-2, 24, on the issue herein pertinent, and non-acquiescence, C.B. 1939-2, 58, as to another issue. See also Revenue Ruling 55-234, C.B. 1955-1, 217, which held, on the facts therein presented, that income realized from business transacted by a corporation through the nominal agency of one of its officers, acting as purported sole proprietor, is taxable to the corporation. However, a physician who receives fees under the above conditions should attach to his Federal income tax return a schedule setting forth the sources of the fees, the amounts received and the disposition made of them.