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or U.S. source, as respondent contends. We hold that it is U.S.
source income.
3. Whether petitioner must include in gross income the
amount of State income tax refunds he received in 1995 and 1996.
We hold that he must.
FINDINGS OF FACT
A. Petitioner
Petitioner was a U.S. citizen residing in American Samoa
during the years in issue and when he filed his petition.
B. Petitioner’s Fishing Employment
Petitioner was employed by the De Silva Sea Encounter Corp.
(De Silva), a Nevada corporation, as the chief engineer of a tuna
fishing vessel (the M/V Sea Encounter). As chief engineer,
petitioner was primarily responsible for the operation, repair,
and maintenance of the ship’s engine and other machinery,
including the refrigeration, storing, and offloading systems
designed to ensure the quality of the catch.
Petitioner performed services for the M/V Sea Encounter in
an American Samoan port or territorial waters 7 days in 1995, 10
days in 1996, and 11 days in 1997, and in international waters
208 days in 1995, 193 days in 1996, and 272 days in 1997. Each
fishing trip began and ended at a port in American Samoa. Each
trip took from 3 weeks to 3 months. After the ship left port, it
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