Nahacky v. Commissioner

U.S. Tax Court

Nahacky v. Commissioner

1967 T.C. Memo. 128, 26 T.C.M. 572, 1967 Tax Ct. Memo LEXIS 133

CourtUnited States Tax Court

DecidedJune 8, 1967

DocketDocket No. 5192-65.

StatusUnpublished

This text of 1967 T.C. Memo. 128 (Nahacky v. Commissioner) is published on Counsel Stack Legal Research, covering United States Tax Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Nahacky v. Commissioner, 1967 T.C. Memo. 128, 26 T.C.M. 572, 1967 Tax Ct. Memo LEXIS 133 (tax 1967).

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Opinion

Anthony and Helen V. Nahacky v. Commissioner.

Nahacky v. Commissioner

Docket No. 5192-65.

United States Tax Court

T.C. Memo 1967-128; 1967 Tax Ct. Memo LEXIS 133; 26 T.C.M. (CCH) 572; T.C.M. (RIA) 67128;

June 8, 1967

*133 During the taxable year 1958, petitioners were employed by Pan American World Airways, Inc., Guided Missiles Range Division, in connection with the performance of its contract with the U.S. Air Force for the maintenance and operation of a down range missile-tracking station located on the island of Trinidad, where petitioners were stationed. The missile base was established by the Air Force pursuant to treaties executed by the United States and Great Britain which provided certain extraterritorial rights for military and civilian personnel involved in the missile program. While stationed down range petitioners lived off the base in facilities furnished by themselves. Held, that during the taxable year involved petitioners were not bona fide residents of a foreign country or countries within the meaning of section 91(a)(1), I.R.C. 1954, and are not entitled to exclude from gross income amounts received in those years for services performed at the down range missile site. Commissioner v. Matthew, 335 F. 2d 231 (C.A. 5, 1964), and Garvis O. Boyd, 46 T.C. 252 (1966), followed.

Anthony Nahacky, pro se, 2811 N. Babcock St., Melbourne, Fla. Vernon J. Owens, for the respondent.

WITHEY

Memorandum Findings of Fact and Opinion

WITHEY, Judge: The Commissioner has determined a deficiency in the income tax of petitioners for the taxable year 1958 in the amount*135 of $1,863.08. The sole issue to be decided is whether respondent has erred in including in the gross income of petitioners $12,104.17 received by them as salary during their employment for a period including one full year on the island of Trinidad, West Indies.

Findings of Fact

This case has been presented under Rule 30 of the Court upon a complete stipulation of facts. The facts as stipulated are found and adopted as our findings of fact and the exhibits attached to the stipulation are included herein by reference.

The petitioners, Anthony and Helen V. Nahacky, are husband and wife who reside at Melbourne, Florida. For the taxable year ended December 31, 1958, petitioners filed a joint Federal income tax return with the district director of internal revenue for the district of Jacksonville, Florida.

Respondent in the statutory notice of deficiency issued to the petitioners on June 2, 1965, disallowed a claimed exclusion from income of wages received during 1958 in the amount of $12,104.17. They received gross income in that amount during the taxable year ended December 31, 1958.

It is stipulated that petitioners do not qualify for the exclusion of income under section 911(a)(2) of the Internal Revenue Code*136 of 1954 inasmuch as they were not present in a foreign country for 510 full days within any period of 18 consecutive months.

On September 16, 1957, petitioner Anthony Nahacky (hereinafter sometimes referred to as Nahacky) was transferred by his employer, Pan American World Airways, Inc. (hereinafter sometimes referred to as Pan American), to Trinidad, West Indies. Sometime subsequent to that date his wife and family moved to Trinidad.

While in Trinidad petitioners leased their house in Melbourne, Florida, to a tenant. They rented the houses in which they lived while in Trinidad. These houses were located at One Rosalino Street in Port of Spain and Six Dickson Avenue in Diego Martin, both in Trinidad. They shipped their personal clothing, considerable furnishings, and automobile to Trinidad when assigned there. Their children attended school on a United States Naval Base, and petitioners paid the necessary tuition and transportation incident to such school. While in Trinidad, the petitioners lived off the local economy.

On January 26, 1959, petitioners returned to the United States.

In Trinidad, Nahacky was employed as a supply supervisor and his wife as a production typist*137 with the Marine Department of Pan American's Guided Missiles Range Division. The gross income of $12,104.17 received by petitioners in 1958 was received as salary or compensation of both of them from Pan American in connection with their employment on Trinidad in the "down range" guided missile program.

Such employment was pursuant to Contract No. AF 08(606)-1156 entered between the United States of America and Pan American World Airways, Inc., on July 1, 1956.

The purpose of the down range missile site was primarily for logistic support of several ocean-range vessels used in conjunction with the Missile Test Range of the Air Force's Missile Test Center (hereinafter sometimes referred to as the Down Range Missile Project).

Petitioners during the taxable year 1958 were employed by Pan American and assigned to the Marine Base in Trinidad as employees engaged in the fulfillment by Pan American of its duties and responsibilities under the contract referred to above.

On March 27, 1941, an Agreement (hereinafter sometimes referred to as the Agreement) between the United Kingdom of Great Britain and Northern Ireland, in consultation with the Government of Newfoundland, and the United*138 States of America was entered. It provided for the lease of certain naval and air bases on various territories (hereinafter sometimes referred to as Leased Areas), including Trinidad, West Indies, to the United States.

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