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wages earned on Johnston Island also was challenged. Umbach v.
Commissioner, docket No. 12348-99.
On July 30, 1999, petitioner filed an amended 1997 joint
Federal income tax return on which petitioner treated the
$143,013 in Raytheon wages that he received in 1997 as nontaxable
income and on which petitioner claimed a refund of the $44,629 in
taxes that he paid relating thereto.
On August 31, 1999, yet another petition was filed in this
Court by another Raytheon employee who worked on Johnston Island
(third Raytheon employee) in which petition the taxability of
wages earned on Johnston Island again was challenged. Haessly v.
Commissioner, docket No. 14496-99.
On September 28, 1999, respondent mailed to petitioner a
notice informing petitioner that respondent was formally
disallowing petitioner’s claim for refund of the $44,629 in taxes
petitioner paid on his Raytheon wages earned in 1997.
Respondent’s letter stated that “The Tax Reform Act of 1986 [Pub.
L. 99-514, sec. 1272, 100 Stat. 2085 (TRA 1986)] amended IRC 931.
Therefore, income from sources within the Johnston Islands does
not qualify for the possession exclusion.”2
On December 21, 1999, after an audit of petitioner’s 1998
Federal income tax return, respondent mailed to petitioner a
2 The record herein does not indicate whether petitioner
ever filed a refund suit in Federal district court with regard to
his disallowed 1997 claim for refund.
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Last modified: May 25, 2011