Alan L. Poe - Page 7

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               You correctly point out that IRC �61 defines income.                   
               More precisely, �61 defines Gross Income. * * *                        
                    Sec. 61.  Gross Income defined.                                   
                    (a) General definition.                                           
                    Except as otherwise provided in this subtitle,                    
                    gross income means all income from whatever                       
                    source derived, including (but not limited to)                    
                    the following items:                                              
                              (1) Compensation for service, including                 
                              fees, commissions, fringe benefits, and                 
                              similar items;                                          
               Wages are considered to be compensation for services.                  
               The U.S. Tax Court has recently ruled on documents and                 
               positions that are substantially identical to the ones                 
               you have put forward.  (See Christopher Kiley v. Com-                  
               missioner, T.C. Memo 2002-315; No. 6676-02L (27 Dec.                   
               2002)) A copy of this case was provided to you at the                  
               hearing.  In Kiley v. Commissioner, the U.S. Tax Court                 
               ruled that the return filed with all -0-‘s and using                   
               substantially identical language in the attachments was                
               clearly frivolous.  The Court went further and assessed                
               a substantial penalty under IRC �6673 for taking the                   
               Court’s time with arguments that have been long settled                
               as a matter of law.                                                    
               A copy of the Court’s warning as provided for in                       
               Pierson v. Commissioner was also given to you at the                   
               Hearing and explained.                                                 
               No spousal defenses were raised.  The only challenges                  
               you raised as to the appropriateness of the collection                 
               actions were couched in terms of arguments that have                   
               previously been identified as frivolous.                               
               You offered no alternatives to the proposed enforced                   
               collection actions.                                                    
               The determination of Appeals is that the proposed                      
               collection action balances the need for efficient                      
               collection of taxes with the intrusiveness of the                      
               action since the liabilities are due and owing and the                 
               notices of proposed enforced collection action were                    
               legally proper.  You were notified that the documents                  

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