                         T.C. Memo. 2007-190



                       UNITED STATES TAX COURT



            KEVIN AND KATHRYN A. KEY, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 12110-05.             Filed July 16, 2007.



     Larry D. Harvey, for petitioners.

     Randall L. Preheim, for respondent.



                         MEMORANDUM OPINION


     VASQUEZ, Judge:    This case is before the Court on

respondent’s motion for summary judgment pursuant to Rule 121.1




     1
        Unless otherwise indicated, all Rule references are to
the Tax Court Rules of Practice and Procedure, and all section
references are to the Internal Revenue Code in effect for the
year in issue.
                                 - 2 -

After a concession,2 the sole issue for decision is whether

petitioners can exclude from income wages earned during 2002 from

working in Antarctica.

                              Background

       At the time they filed the petition, petitioners resided in

Broomfield, Colorado.    During 2002, petitioners performed

services at McMurdo Station in Ross Island, Antarctica.    On their

2002 Federal income tax return, petitioners excluded wage income

earned and received during 2002 for services performed in

Antarctica.

                              Discussion

I.   Summary Judgment

       Rule 121(a) provides that either party may move for summary

judgment upon all or any part of the legal issues in controversy.

Full or partial summary judgment may be granted only if it is

demonstrated that no genuine issue exists as to any material fact

and that the legal issues presented by the motion may be decided

as a matter of law.     See Rule 121(b); Sundstrand Corp. v.

Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th

Cir. 1994).    We conclude that there is no genuine issue as to any

material fact and that a decision may be rendered as a matter of

law.



       2
        Respondent concedes that no penalty pursuant to sec. 6662
is due from petitioners for 2002.
                                   - 3 -

II.    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.

III.       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
                                                   (continued...)
                                  - 4 -

IV.   Conclusion

      Accordingly, for the reasons stated in Arnett I, Arnett II,

and herein, we conclude that petitioners cannot exclude from

gross income wages earned during 2002 from working in Antarctica.

      To reflect the foregoing,


                                               An appropriate order and

                                          decision will be entered.




      3
      (...continued)
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
      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).
