poses and not taxable as part of exchange. Koch v. Commissioner, 71 T.C. 54, followed. Peabody Natural Resources Co. v. Commis- sioner
Earnings-Sources Outside United States-Antarctica.- Where in filing 2001 income tax return petitioner excluded wage income received while residing and performing services in Antarc- tica as employee of company that contracted with U.S. agency conducting research; petitioner excluded wages from gross income "as not earned from sources within the United States" and claimed entitlement to foreign earned income exclusion under sec. 911; and Commissioner issued deficiency notice determining excluded wage income earned in Antarctica was taxable, Court determined Antarc- tica was not foreign country for purposes of Internal Revenue Code, and petitioner's wage income was not excludable from income under sec. 911, and Court granted Commissioner's motion for summary judgment. Arnett v. Commissioner
See also UNITED STATES TAX COURT. Overpayment of Corporation- Applicable Interest Rate.-Where petitioner corporation, which elected S status in 1997, was entitled to recover with interest over- payment of tax on built-in gain (Garwood Irrigation Co. v. Commis- sioner, T.C. Memo. 2004-195) exceeding $10,000 for TYE Dec. 31, 1999; in computing interest due on overpayment, Commissioner used reduced rate of flush language of sec. 6621(a)(1), Federal short-term rate plus 0.5 percent; and petitioner contended higher interest paid to noncorporate taxpayers under sec. 6621(a)(1)(A) and (B) applied, Court determined petitioner was entitled to higher rate of interest (Federal short-term rate plus 2 percent) specified in sec. 6621(a)(1)(B), since lower rate of sec. 6621(a)(1) applied to C cor- porations and 3-percent rate provided in sec. 6621(a)(1)(B) was for noncorporate taxpayers. Garwood Irrigation Co. v. Commis- sioner
Action for Redetermination of Employment Status-Lim- ited Liability Company-Applicability of Bankruptcy Auto- matic Stay.-Where petitioner X, limited liability company orga- nized under Tennessee law with both corporation and partnership features, brought action for redetermination of employment status
under sec. 7436 and Tax Court Rule 291; X was owned and oper- ated by H and W, who had filed ch. 7 bankruptcy petitions; Commissioner's notice of worker classification determined that 13 specified individuals were X's employees and X consequently owed additional employment tax for calendar year 2000; on Jan. 13, 2006, pursuant to Tax Court Rule 91(f), Commissioner filed motion to show cause why proposed facts and evidence should not be accepted as established; and, in response, petitioner contended case should be stayed automatically pursuant to 11 U.S.C. sec. 362(a), Court determined (1) automatic stay provision of 11 U.S.C. sec. 362(a)(8) was inapplicable to proceeding concerning X's employment tax liabilities because X had not filed petition in bankruptcy court and was not debtor therein, and (2) consideration of equitable relief under 11 U.S.C. sec. 105(a) lay with bankruptcy court, not Tax Court. People Place Auto Hand Carwash, LLC v. Commis- sioner
See CAPITAL GAINS AND LOSSES.
Joint Liability and Claim for Sec. 6015 Relief-Refund- Community Property Assets Used To Satisfy Understate- ments Attributable to Spouse's Erroneous Item.-Where H and petitioner W, resident of community property State, had paid tax liabilities determined on jointly filed 1982-84 income tax returns but additional tax liabilities arose that were attributable to H's erroneous items; Commissioner applied payments to liabilities attributable to H's erroneous items from "community property" (defined in Cal. Fam. Code sec. 760 (West 2004)) and from W's "separate property" (defined in Cal. Fam. Code sec. 770(a) (West 2004)); Commissioner conceded W's entitlement to sec. 6015(b) relief for 1982-84, resulting in zero liability for W; and W's petition for relief from joint and several liability sought sec. 6015(g) refund of payments Commissioner applied to H's understatements using W's separate property and community property, Court determined W was not entitled to refund of community property amounts used to pay H's understatements, since Congress did not intend for community property laws to be disregarded under sec. 6015(g)(1) regarding payments made on tax liabilities. Ordlock v. Commis- sioner
SMALL BUSINESS CORPORATIONS
Interest on Overpayment of Corporate Tax-Interest Accrued as of Dec. 31, 1994-Applicability of Compound Interest Rate or Reduced Rate of Sec. 6621(a)(1).-Where, as of Jan. 1, 1995, effective date of amended sec. 6621(a)(1), petitioner corporations had received refunds of overpayments exceeding $10,000 for taxable years 1979-85 and had outstanding accrued overpayment interest balance of $1.6 billion, which was paid in 2004-2005; Commissioner contended reduced sec. 6621(a)(1) interest rate applied to overpayment; and petitioners contended regular sec. 6611 corporate overpayment interest rate continued to apply after Dec. 31, 1994, to accrued overpayment balance (com- pounded daily pursuant to sec. 6622), Court determined all of petitioners' Dec. 31, 1994, $1.6 billion overpayment interest accrued interest at reduced sec. 6621(a)(1) rate. (Gen. Elec. Co. v. United States, 56 Fed. Cl. 488 (2003), and State Farm Mut. Auto. Ins. Co. v. Commissioner, 126 T.C. 28, followed). Exxon Mobil Corp. & Cos. v. Commissioner
Interest on Overpayment of Tax-Regular Rate or Lower Sec. 6621(a)(1) Rate on Interest Accrued as of Dec. 31, 1994- Applicability of $10,000 Threshold.-Where Court earlier held that petitioner had 1987 overpayment (State Farm Mut. Auto. Inc. Co. v. Commissioner, 119 T.C. 342); on Dec. 15, 2004, Commissioner issued two checks covering petitioner's overpayment plus interest; petitioner moved under Rule 261 and sec. 7481(c) for higher rate of interest on overpayment because Commissioner had used reduced rate of sec. 6621(a)(1) (GATT rate) in compounding interest that had accrued before 1995; petitioner contended regular rate of interest continued to apply after Jan. 1, 1995, to previously accrued interest; and parties disputed whether $10,000 threshold of sec. 6621(a)(1) applied to highest total overpayment that previously existed or amount at Dec. 31, 1994, effective date of GATT rate change, Court determined (1) GATT rate applied to interest owed petitioner as of Dec. 31, 1994; and (2) entire remaining overpay- ment of tax was subject to GATT rate, since amount exceeding $10,000 threshold had already been refunded on due date of return for 1987 taxable year. State Farm Mut. Auto. Ins. Co. v. Commissioner
СС п'? солЕВИШЕЙІ ЬШИМИС OLLICE:S000-350-80$\\0023
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