Edward D. Clark - Page 20




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              Petitioner has failed to show that his positions on his                 
         returns for the years in issue were taken with reasonable cause              
         and in good faith within the meaning of section 6664(c)(1).  He              
         has presented no evidence that he acted in reasonable reliance on            
         the advice of a tax professional in asserting the positions taken            
         on his returns.  He claims that he read the instructions to Form             
         2555-EZ before claiming the foreign earned income exclusion of               
         all of his income for the years in issue; however, those                     
         instructions make clear that U.S. military retirement pay is not             
         foreign earned income.  Petitioner failed to include his military            
         retirement pay as gross income and instead characterized those               
         amounts as wage income and excluded them.                                    
              Petitioner’s general arguments that his income earned in                
         international waters is foreign source income excludable under               
         section 911 from gross income, while extensive, ignore the plain             
         provisions of section 911 and the legislative regulations.                   
         Petitioner relies on the general sourcing rules of sections 861              
         through 865, but those sections do not provide a rule for                    
         sourcing income in petitioner’s particular situation.  Petitioner            
         has not addressed the terms of the statute and the regulations               
         under section 911 and, in excluding all of his income from gross             
         income for Federal income tax purposes, has not shown that he                
         took care to assess properly his tax liability or that he had                
         reasonable cause in failing to do so.  Thus, petitioner is liable            







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