- 3 -
Tips " " 3,556
Wages Denny's Restaurants 58
Tips " " 49
The addition to tax under section 6651(a)(1) is based on
respondent's determination that petitioner's failure to timely
file an income tax return for the taxable year in issue was not
due to reasonable cause.
Petitioner's Petition
Petitioner filed her petition on August 14, 1995. The crux
of petitioner's position is that wages are not income, apparently
because of the provisions of section 83 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:
8. Until a compleat [sic] and concise explanation of
why intangible property is not a cost when it is
disposed of to obtain other property and tangible
property IS, 26 CFR 1.83-3(g) must be held to protect
sums received under contract for the purchase of
services from inclusion in gross income. After all, �
61(a) applies only to "gross income" ("Gross Income
Defined") and does not apply to compensation which may
be "excluded by law" (See 1.61-1, -2). Cost is always
excluded.
9. Until these arguments can be statutorily disposed
of, Petitioner contends that the FMV of services can be
included in gross income only by violating � 1001 and,
26 CFR 1.1001-1(a).
Petitioner attached several documents to her petition
composed of over 100 pages of typewritten materials expanding on
the arguments set forth above.
Respondent's Rule 40 Motion and Subsequent Developments
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Last modified: May 25, 2011