George Y. Erlandson v. Commissioner of Internal Revenue

This is a proceeding by a taxpayer to review a decision of the Tax Court redetermining an asserted income tax deficiency.

George Y. Erlandson failed to report for income tax purposes $10,299.97 received by him in 1954 as wages while serving as second officer on the S.S. Jumper Hitch. This sum was omitted from the report on the ground that it constituted income not paid by the United States or an agency thereof earned while Erlandson was in a foreign country. Section 911(a) (2) of the Internal Revenue Code of 1954, 26 U.S.C.A. § 911 (a) (2) provides for the exclusion of such an item from gross income and its exemption from taxation.

Disallowing this omission from gross income, the Commissioner of Internal Revenue gave Erlandson notice of a $1,-960.30 deficiency in his income tax for 1954. Erlandson petitioned the Tax Court for a redetermination. Holding that the wages in question were paid by the United States or an agency thereof and were therefore not excludable under section 911(a) (2), the Tax Court redetermined the tax deficiency to be the same as originally determined by the Commissioner. In reaching this decision the Tax Court placed prime reliance upon its own decision in…