T.C. Memo. 2008-7
UNITED STATES TAX COURT
JOHN K. YAMASAKI, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 20712-03. Filed January 22, 2008.
John K. Yamasaki, pro se.
Randall L. Preheim, for respondent.
MEMORANDUM OPINION
VASQUEZ, Judge: Respondent determined a deficiency in and a
section 6662 penalty on petitioner’s 2000 Federal income tax.1
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue.
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After a concession,2 the sole issue for decision is whether
petitioner can exclude from income wages earned during 2000 from
working in Antarctica.
Background
At the time he filed the petition, petitioner resided in
Tucson, Arizona. During 2000, petitioner performed services at
McMurdo Station in Ross Island, Antarctica. On his 2000 Federal
income tax return, petitioner excluded wage income earned and
received during 2000 for services performed in Antarctica.
Discussion
I. In General
Section 61(a) provides that gross income means all income
from whatever source derived. Accordingly, citizens of the
United States generally are taxed on income earned outside the
geographical boundaries of the United States unless the income is
specifically excluded from gross income. Specking v.
Commissioner, 117 T.C. 95, 101-102 (2001), affd. sub nom. Haessly
v. Commissioner, 68 Fed. Appx. 44 (9th Cir. 2003), affd. sub nom.
Umbach v. Commissioner, 357 F.3d 1108 (10th Cir. 2003).
Exclusions from income are construed narrowly, and taxpayers must
bring themselves within the clear scope of the exclusion. Id.
2
Respondent concedes that no penalty pursuant to sec. 6662
is due from petitioner for 2000.
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II. Section 911
In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett
I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed
the arguments made by the parties herein regarding section 911.
The U.S. Court of Appeals for the Seventh Circuit agreed with our
analysis of section 911 and affirmed our conclusion that
Antarctica is not a “foreign country” pursuant to section 911 and
the regulations thereunder. Arnett v. Commissioner, 473 F.3d at
799. We shall not repeat our analysis from Arnett I herein. We
follow our analysis and holding in Arnett I and the analysis and
holding of the Court of Appeals in Arnett II.3
3
In Arnett v. Commissioner, 126 T.C. 89 (2006), affd. 473
F.3d 790 (7th Cir. 2007), we concluded our Opinion with a
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
(continued...)
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III. 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 2000 from working in Antarctica.
To reflect the foregoing,
An appropriate decision
will be entered.
3
(...continued)
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).