- 3 - The additions to tax under section 6651(a)(1) are based on respondent's determination that petitioner's failure to file income tax returns for the years in issue was not due to reasonable cause. Petitioner's Petition Petitioner filed an eight page typewritten petition for redetermination on May 26, 1995. The crux of petitioner's position is that wages are not income, apparently because of the provisions of sections 83 and 7701(e) and the notion that a person's labor is property in which the person has a basis equal to its fair market value. Thus, the petition includes the following allegations: When a lessee disposes of, or damages, property belonging to the lessor, is the amount needed to compensate the lessor to be included in the lessor's gross income when paid to him by the lessee? NO. The Respondent cannot tax as gross income, therefore, the amount received for labor or services of an employee or contractor, disposed of by an employer or customer of a contractor, without violating � 7701(e)[2] which says that service contracts shall be treated as leases of 2 Sec. 7701(e) provides in part as follows: (e) Treatment of Certain Contracts for Providing Services, Etc.--For purposes of chapter 1-- (1) In General.--A contract which purports to be a service contract shall be treated as a lease of property if such contract is properly treated as a lease of property, taking into account all relevant factors including whether or not-- (A) the service recipient is in physical possession of the property * * *Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011