Stephen V. Talmage - Page 15

               Petitioner's primary argument3 is that section 83, Property            
          Transferred in Connection with Performance of Services, has the             
          effect of exempting his wages from income tax because it requires           
          us to apply section 1012, which specifies that cost should be               
          used to determine the basis of property (unless the Code provides           
          otherwise) to determine the extent to which wages constitute                
          taxable income.  Petitioner asserts that he "paid" for his wages            
          with his labor and that section 83 allows the value of his labor            
          as a cost to be offset against his wages, thereby exempting them            
          from tax.  Section 83 provides that property received for                   
          services is taxable to the recipient of the property to the                 

          3Petitioner advances some other frivolous arguments.  He                    
          claims that sec. 3121(e) ("An individual who is a citizen of the            
          Commonwealth of Puerto Rico (but not otherwise a citizen of the             
          United States) shall be considered, for purposes of this section,           
          as a citizen of the United States") implies that he is not a                
          citizen of the United States for the purposes of the income tax.            
          Obviously, that subsection includes citizens of Puerto Rico among           
          people considered citizens of the United States for the purposes            
          of sec. 3121, which has to do with the FICA tax, but it does not            
          exclude other citizens of the United States from that class.  In            
          any case, the words "for purposes of this section" (which                   
          petitioner significantly omits) mean that the provision has no              
          effect on the income tax, which is what is at issue in the case             
          at hand.  Attempting to reach the same result, he similarly                 
          misuses secs. 1402(b) and 7655.  Petitioner also claims that sec.           
          6201, Assessment Authority, limits respondent's authority to                
          assess taxes to taxes paid by stamp.  Sec. 6201 does grant                  
          respondent assessment authority, and other authority, with                  
          respect to taxes payable by stamp, but it also grants such                  
          authority with respect to all taxes as to which returns or lists            
          are made under the Code, and this clearly includes the income               
               Significantly, these same subsidiary arguments, as well as             
          petitioner's main argument, were made in precisely the same                 
          words, and rejected by us, in Santangelo v. Commissioner, T.C.              
          Memo. 1995-468.                                                             

Page:  Previous  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  Next

Last modified: May 25, 2011