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at issue to exclude from his gross income under section 931 the
wages that he received from Raytheon during that year. In
support of that position, petitioner relies on section 1.931-1,
Income Tax Regs. Although not altogether clear, it appears that
petitioner is arguing that, because section 1.931-1(a)(1), Income
Tax Regs., provides that the term “possession of the United
States” includes Johnston Island, he is entitled for 1998 to
exclude the wages that he received while residing and working
there during that year. Respondent counters that petitioner’s
wages for the year at issue are not excludable under section
931.3 We agree with respondent.
The Treasury Department promulgated section 1.931-1, Income
Tax Regs., under section 931 prior to its amendment (old section
931) by section 1272(a) of the Tax Reform Act of 1986 (TRA 1986),
Pub. L. 99-514, 100 Stat. 2593.4 Old section 931 permitted
citizens of the United States to exclude income derived from
sources within possessions of the United States, except Puerto
Rico, the U.S. Virgin Islands, and Guam, if certain conditions
were satisfied. Although old section 931 did not define the term
“possession of the United States”, regulations promulgated under
3Respondent also argues that petitioner’s wage income for
1998 is not excludable under sec. 911.
4The Treasury Department promulgated the last amendment to
section 1.931-1, Income Tax Regs., in 1975. T.D. 7385, 1975-2
C.B. 298.
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