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refund. Attached to the Form 4852 was Form 8275, Disclosure
Statement, in which petitioner claimed that the Office of
Personnel Management had “improperly reported” annuities paid to
him as gross income because this “remuneration” was not from any
of the foreign sources listed in section 861 and the regulations
thereunder.
By letter dated July 14, 2004, respondent’s Appeals Office
provided petitioner a document entitled “The Truth About
Frivolous Tax Arguments”, which contained, among other things, a
discussion, with citations to relevant authority, of the
frivolous nature of the contention that only foreign-source
income under section 861 is taxable. This document also
described penalties, including the section 6673 penalty, for
pursuing frivolous tax arguments.
In the notice of deficiency, issued July 21, 2004,
respondent determined that the $23,988 that petitioner had
received from the Office of Personnel Management in 2001
represented taxable income under section 61. Respondent also
determined that petitioner had $2,009 unreported self-employment
income as shown on Form 1099-MISC, Miscellaneous Income, from
Monumental Life Insurance Company and that petitioner’s 2001
Social Security benefits were taxable in the amount of $965.
Respondent determined that petitioner was liable for a section
6662 accuracy-related penalty of $578.
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