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All section references are to the Internal Revenue Code in
effect for 1994, and all Rule references are to the Tax Court Rules
of Practice and Procedure.
Petitioner resided in Santa Maria, California, at the time he
filed his petition.
Background
During 1994, petitioner was employed as an engineer for the
Northrop Grumman Corp., for which he was paid $67,337 for services
rendered. On his 1994 Federal income tax return, petitioner
reported the wages from his employment, but claimed a deduction in
an amount equal to the wages for "Non Taxable
Compensation/Renumeration Eisner vs McComber [sic] 252 US 189". As
a result, petitioner reported no taxable income and claimed a
$12,342 refund due to the Federal income taxes withheld by his
employer during the year.1 Above his signature on the return,
petitioner stamped the words "'Under Protest' UCC 1-207".
In his petition, filed September 30, 1996, petitioner stated
that he "disagree[d] with the disallowance of compensation for
labor as non-taxable income." During October and November 1997,
petitioner served on respondent two requests to produce documents,
a set of interrogatories, and requests for admissions, all seeking
the factual and legal basis for respondent's deficiency
1 The Internal Revenue Service "froze" the refund and
applied it as a prepayment credit against the 1994 deficiency.
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Last modified: May 25, 2011