Amaro A. Taibo - Page 5

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          letter notifying petitioner that the $156,741 in Raytheon wages             
          that petitioner received in 1998 constituted taxable income with            
          respect to which $41,898 in taxes was due.  Attached to the                 
          letter was Form 886-A, Explanation of Items, which stated:                  

               Since your home is not in a foreign country, but a territory           
               of the United States, your earned income is not excludable             
               under Internal Revenue Code 911.  See 1.911-2([g]) & (h) for           
               the United States and foreign country defined.  Also, since            
               you are not a bona fide resident of a specified possession             
               “as defined in Internal Revenue Code 931(c)”, you do not               
               qualify for the possession exclusion.                                  

               In early 2000, petitioner paid to respondent $49,285,                  
          reflecting the full $41,898 tax deficiency for 1998 determined by           
          respondent, including interest, and no formal notice of                     
          deficiency for 1998 was ever mailed to petitioner.  With respect            
          to 1998, respondent did not impose a penalty against petitioner             
          relating to the treatment on petitioner’s 1998 Federal income tax           
          return of his Raytheon wages as nontaxable income.                          
               On February 28, 2000, a complaint was filed in Federal                 
          district court by a fourth Raytheon employee who worked on                  
          Johnston Island in which complaint the taxability of wages earned           
          on Johnston Island was challenged.  Farrell v. United States, No.           
          CV 00-00164SOM-KSC.                                                         
               The record herein does not include a copy of petitioner’s              
          1999 Federal income tax return, apparently filed in April of                
          2000, and the record herein does not indicate whether petitioner            






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