James and Terri Carskadon - Page 7

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          United States a penalty not in excess of $25,000 whenever it                
          appears that proceedings have been instituted or maintained by              
          the taxpayer primarily for delay or that the taxpayer’s position            
          in such proceedings is frivolous or groundless.                             
               Petitioner has not denied that he received $50,847 from his            
          employers during 1998.  Further, in their petition, petitioners             
          concede that the $411 received from ALIC and the $3,264 received            
          from the Department of the Air Force are taxable wages.                     
          Petitioners theorize that since petitioner did not expend any               
          time in exchange for the funds from ALIC and the Air Force, these           
          wages are taxable.  Conversely, petitioners argue that the funds            
          received from petitioner’s other employers are not taxable                  
          because petitioner obtained the funds in exchange for his time.             
          Petitioners assert that petitioner’s wages are not taxable                  
          because the Code, which states exactly what is taxable, does not            
          specifically state that “time reimbursement transactions”, a term           
          of art coined by petitioners, are taxable.  However, the Code               
          does not limit gross income to the list provided in section                 
          61(a).  Gross income means all income from whatever source                  
          derived.  Sec. 61(a).  Petitioners’ arguments completely                    
          disregard the definition of gross income.                                   
               Petitioners have failed to raise any bona fide dispute as to           
          the amounts reported by petitioner’s various employers as wages.            
          Petitioners’ arguments that petitioner’s wages are not taxable              






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