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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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Last modified: May 25, 2011