Diane M. Barber - Page 4




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          IV.  Conclusion                                                             
               Accordingly, for the reasons stated in Arnett I, Arnett II,            
          and herein, we conclude that petitioner cannot exclude from gross           
          income wages earned during 2002 from working in Antarctica.                 
               To reflect the foregoing,                                              

                                                  An appropriate order and            
                                             decision will be entered.                




               3(...continued)                                                        
          citation of sec. 863(d) suggesting that sec. 863(d) provided an             
          additional reason to rule against the taxpayer.  Id. at 96 (“See            
          also sec. 863(d) (providing that income earned in Antarctica by a           
          U.S. person is sourced in the United States).”).  In Arnett v.              
          Commissioner, 473 F.3d at 797, the U.S. Court of Appeals for the            
          Seventh Circuit addressed sec. 863(d) in greater detail, stating:           
                    At the outset, we think that it is important to                   
               note that considering Antarctica not to be a “foreign                  
               country” is compatible with the general statutory                      
               scheme.  Notably, section 911 is found under subtitle                  
               A, chapter 1, subchapter N of the IRC, which is                        
               designated “Tax Based on Income from Sources Within or                 
               Without the United States.”  Part I of this subchapter,                
               entitled “Source Rules and Other General Rules Relating                
               to Foreign Income,” deems any activity in Antarctica to                
               be “space or ocean activity.”  In turn, the United                     
               States is designated the source country of income from                 
               such activity when earned by a citizen of the United                   
               States.  26 U.S.C.  863(d).  Although this provision                  
               does not provide a definitive answer as to whether                     
               Antarctica is a “foreign country,” it supports the                     
               conclusion that section 911 is not intended to apply to                
               income earned for services provided in Antarctica.                     
          We take this opportunity to state our agreement with the Court of           
          Appeals’ conclusion set forth above.  See also HCSC-Laundry v.              
          United States, 450 U.S. 1, 6 (1981).                                        





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