Brian G. Takaba - Page 11




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          provide a tax exemption for U.S. source income of U.S. citizens,            
          including Williams v. Commissioner, 114 T.C. 136 (2000), and                
          Aiello v. Commissioner, T.C. Memo. 1995-40.  He quoted our                  
          statement in Williams v. Commissioner, supra at 138-139, that:              
          “Petitioner’s arguments are reminiscent of tax-protester rhetoric           
          that has been universally rejected by this and other courts.”  He           
          also quoted that portion of our report in Aiello in which we                
          refer to the position of the Court of Appeals for the Ninth                 
          Circuit:                                                                    
               The Court of Appeals for the Ninth Circuit, to which                   
               any appeal in this case will lie, has stated,                          
               “Compensation for labor or services, paid in the form                  
               of wages or salary, has been universally held by the                   
               courts of this republic to be income, subject to the                   
               income tax laws currently applicable.”  United States                  
               v. Romero, 640 F.2d 1014, 1016 (9th Cir. 1981).  * * *                 
          He stated:  “Although you apparently understood our arguments in            
          this case, you dismissed them as ‘a normal response from a tax              
          collector’.  But you provide no support for your interpretation             
          of sections 61 and 861.  Please provide us with any cases                   
          supporting your position.”  He warned Mr. Sulla that respondent             
          would seek a penalty against petitioner under section 6673(a)(1)            
          and was considering asking the Court to impose costs on Mr. Sulla           
          pursuant to section 6673(a)(2).                                             
               Mr. Sulla reiterated the 861 argument in his declaration               
          attached to petitioner’s “Memorandum in Opposition to Motion for            
          Summary Judgment and Motion for Damages” (sometimes, petitioner’s           






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