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tax by treaty. In a statement attached to the forms, petitioner
reported that he resided in Arkansas, USA. Petitioner denied
that he was a U.S. citizen or a resident of a State subject to
U.S. sovereignty. He also denied that he was a nonresident alien
engaged in a trade or business within the United States.
Petitioner reported that the $65,000 in income that he received
was "exempted from U.S. tax imposition pursuant to the United
States tax convention of September 17, 1787" (citing U.S. Const.
art. I, sec. 2; sec. 894 (Income Affected by Treaty)).
In September 1995, petitioner submitted a fourth set of
documents to the IRS for each of the years in issue. The
documents were entitled "Statement in Lieu of Return" and
reported that petitioner received $65,000 per year in Federal
Reserve Notes. Among other declarations, petitioner stated that
the Federal Reserve Notes were not income because they were not
redeemable in gold or silver and do not constitute payment in
U.S. dollars. Petitioner deducted a $65,000 fair market value
from the amount of Federal Reserve Notes that he received and
calculated "0" income and no tax owed.
The petition in this case does not allege any factual basis
that establishes error in respondent's deficiency determination.
Instead, the petition, along with other pleadings, contains tax
protester arguments. Petitioner did not cooperate with
respondent during the preparation of this case. During the audit
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