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nonemployee compensation of $6,380. The $6,380 represented the
value of the lodging furnished to petitioner.4
Petitioner filed a Form 1040 for 2001. On his return,
petitioner listed his occupation as “computer operator”, and he
reported his wages as disclosed on his Form W-2 from Raytheon.
Petitioner did not, however, include in gross income the value of
the lodging furnished to him; rather, he attached to his return a
statement that was substantively identical to the statement that
he attached to his 2000 return.5
Notice of Deficiency
In the notice of deficiency, respondent determined that
petitioner was not entitled to an exclusion under section 119 for
the value of the lodging furnished to him and that petitioner
4 See supra note 3.
5 As previously stated, supra note 2, Pine Gap was
authorized under a treaty between the United States and Australia
that “generally provides for establishing and operating a
facility for general defense research”. Hargrove v.
Commissioner, supra at n.10.
[U]nder the treaty, contractors’ income shall be deemed
not to have been derived in Australia for Australian
tax purposes as long as it is not exempt from and is
subject to tax in the United States. * * * If the
lodging income were exempt from U.S. tax, this
provision would entitle Australia to tax it instead.
Id. In the instant case, there is no suggestion whatsoever in
the record that petitioner filed Australian tax returns or paid
Australian tax on the value of his lodging in Alice Springs. See
Rule 121(d).
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Last modified: November 10, 2007