Judges: "Vasquez, Juan F."
Attorneys: Gerald Stephen Macala, II, Pro se. Randall L. Preheim , for respondent.
Filed: Jan. 22, 2008
Latest Update: Dec. 05, 2020
Summary: T.C. Summary Opinion 2008-7 UNITED STATES TAX COURT GERALD STEPHEN MACALA, II, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 21605-03S. Filed January 22, 2008. Gerald Stephen Macala, II, pro se. Randall L. Preheim, for respondent. VASQUEZ, Judge: This case was heard pursuant to the provisions of section 7463 of the Internal Revenue Code in effect when the petition was filed.1 Pursuant to section 7463(b), the decision to be entered is not reviewable by any other court, and
Summary: T.C. Summary Opinion 2008-7 UNITED STATES TAX COURT GERALD STEPHEN MACALA, II, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 21605-03S. Filed January 22, 2008. Gerald Stephen Macala, II, pro se. Randall L. Preheim, for respondent. VASQUEZ, Judge: This case was heard pursuant to the provisions of section 7463 of the Internal Revenue Code in effect when the petition was filed.1 Pursuant to section 7463(b), the decision to be entered is not reviewable by any other court, and ..
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T.C. Summary Opinion 2008-7
UNITED STATES TAX COURT
GERALD STEPHEN MACALA, II, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 21605-03S. Filed January 22, 2008.
Gerald Stephen Macala, II, pro se.
Randall L. Preheim, for respondent.
VASQUEZ, Judge: This case was heard pursuant to the
provisions of section 7463 of the Internal Revenue Code in effect
when the petition was filed.1 Pursuant to section 7463(b), the
decision to be entered is not reviewable by any other court, and
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
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this opinion shall not be treated as precedent for any other
case.
This case is before the Court on respondent’s motion for
summary judgment pursuant to Rule 121. After a concession,2 the
sole issue for decision is whether petitioner can exclude from
income wages earned during 2001 from working in Antarctica.
Background
At the time he filed the petition, petitioner resided in
Santa Barbara, California. During 2001, petitioner performed
services at McMurdo Station in Ross Island, Antarctica. On his
2001 Federal income tax return, petitioner excluded wage income
earned and received during 2001 for services performed in
Antarctica.
Discussion
I. Summary Judgment
Rule 121(a) provides that either party may move for summary
judgment upon all or any part of the legal issues in controversy.
Full or partial summary judgment may be granted only if it is
demonstrated that no genuine issue exists as to any material fact
and that the legal issues presented by the motion may be decided
as a matter of law. See Rule 121(b); Sundstrand Corp. v.
Commissioner,
98 T.C. 518, 520 (1992), affd.
17 F.3d 965 (7th
2
Respondent concedes that no penalty pursuant to sec. 6662
is due from petitioner for 2001.
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Cir. 1994). We conclude that there is no genuine issue as to any
material fact and that a decision may be rendered as a matter of
law.
II. In General
Section 61(a) provides that gross income means all income
from whatever source derived. Accordingly, citizens of the
United States generally are taxed on income earned outside the
geographical boundaries of the United States unless the income is
specifically excluded from gross income. Specking v.
Commissioner,
117 T.C. 95, 101-102 (2001), affd. sub nom. Haessly
v. Commissioner,
68 Fed. Appx. 44 (9th Cir. 2003), affd. sub nom.
Umbach v. Commissioner,
357 F.3d 1108 (10th Cir. 2003).
Exclusions from income are construed narrowly, and taxpayers must
bring themselves within the clear scope of the exclusion.
Id.
III. Section 911
In Arnett v. Commissioner,
126 T.C. 89, 91-96 (2006) (Arnett
I), affd.
473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed
the arguments made by the parties herein regarding section 911.
The U.S. Court of Appeals for the Seventh Circuit agreed with our
analysis of section 911 and affirmed our conclusion that
Antarctica is not a “foreign country” pursuant to section 911 and
the regulations thereunder. Arnett v.
Commissioner, 473 F.3d at
799. We shall not repeat our analysis from Arnett I herein. We
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follow our analysis and holding in Arnett I and the analysis and
holding of the Court of Appeals in Arnett II.3
IV. Conclusion
Accordingly, for the reasons stated in Arnett I, Arnett II,
and herein, we conclude that petitioner cannot exclude from gross
income wages earned during 2001 from working in Antarctica.
3
In Arnett v. Commissioner,
126 T.C. 89 (2006), affd.
473
F.3d 790 (7th Cir. 2007), we concluded our Opinion with a
citation of sec. 863(d) suggesting that sec. 863(d) provided an
additional reason to rule against the taxpayer.
Id. at 96 (“See
also sec. 863(d) (providing that income earned in Antarctica by a
U.S. person is sourced in the United States).”). In Arnett v.
Commissioner, 473 F.3d at 797, the U.S. Court of Appeals for the
Seventh Circuit addressed sec. 863(d) in greater detail, stating:
At the outset, we think that it is important to
note that considering Antarctica not to be a “foreign
country” is compatible with the general statutory
scheme. Notably, section 911 is found under subtitle
A, chapter 1, subchapter N of the IRC, which is
designated “Tax Based on Income from Sources Within or
Without the United States.” Part I of this subchapter,
entitled “Source Rules and Other General Rules Relating
to Foreign Income,” deems any activity in Antarctica to
be “space or ocean activity.” In turn, the United
States is designated the source country of income from
such activity when earned by a citizen of the United
States. 26 U.S.C. § 863(d). Although this provision
does not provide a definitive answer as to whether
Antarctica is a “foreign country,” it supports the
conclusion that section 911 is not intended to apply to
income earned for services provided in Antarctica.
We take this opportunity to state our agreement with the Court of
Appeals’ conclusion set forth above. See also HCSC-Laundry v.
United States,
450 U.S. 1, 6 (1981).
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To reflect the foregoing,
An appropriate order and
decision will be entered.