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property (labor and time)” and that such profit, which petitioner
refers to as “non-statutory wages”, is not subject to tax. In
support of his position with respect to his pension income for
1997, petitioner argues that, because such income “was derived
from non-statutory wages of previous years * * * the withdrawal
of the earlier deposited non-statutory wages, which are non
taxable funds, does not convert them to taxable gross income.”6
Petitioner’s position that his net profit for each of the
years at issue from his washing machine repair business and his
pension income for 1997 are not subject to tax is frivolous and
groundless. On the record before us, we hold that petitioner’s
net profit for each of the years at issue from his washing
machine repair business is subject to tax. We further hold on
that record that petitioner’s pension income for 1997 is subject
to tax and that petitioner is liable for that year for the 10-
percent additional tax under section 72(t)(1) on such pension
income.
We turn now to the addition to tax under section 6651(a)(1)
that respondent determined for each of the years at issue. With
respect to 1996, petitioner contends that petitioner’s document
6Petitioner introduced no evidence and makes no argument
about the 10-percent additional tax under sec. 72(t)(1) for 1997
that respondent determined in the notice. We presume that it is
petitioner’s position that he should not be liable for that
additional tax because it is his position that his pension income
for 1997 is not subject to tax.
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