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to standardized meal expense deductions for meal expenses he
neither paid nor incurred, rather than the position he took on
his returns, in which he claimed that he was liable for no
Federal income tax. Petitioner did not consult a tax
professional before taking this position on his returns.
Petitioner also testified at trial that he read the
instructions to Form 2555-EZ before he completed his returns for
the years in issue. Those instructions state, in relevant part,
that foreign earned income does not include amounts paid by the
U.S. Government. Petitioner improperly and unreasonably excluded
his U.S. military retirement pay from gross income for all years
in issue.
Petitioner argues that he should not be liable for the
accuracy-related penalties under section 6662 because, in spite
of his failure “to account for some minimal interest and military
retirement pay income” for the years in issue, his returns were
timely and substantially accurate. However, petitioner’s returns
were not substantially accurate. Petitioner haphazardly prepared
his returns for the years in issue, incorrectly characterizing
all of his income as wages and failing to include $9,051 of
retirement pay in 2004. He then excluded all of that income as
foreign earned income, disregarding the instructions that clearly
stated his military retirement pay was ineligible for the
exclusion.
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Last modified: March 27, 2008