Inga I. Kramarenko
9192-14
Tax Ct.Jun 9, 2025Background
- Dr. Inga Kramarenko, a Russian-trained Ph.D., worked as a postdoctoral researcher at the Medical University of South Carolina (MUSC) from 2010-2011, performing lab work and receiving a salary funded by NIH research project grants.
- Kramarenko was initially present in the U.S. on a J-1 Exchange Visitor visa; by the tax years at issue, she was a resident alien, having married an American and lived in South Carolina since 2008.
- During her time at MUSC, she completed standard employment-related paperwork (W-4, I-9) and was treated as an employee, including regular pay and employment benefits.
- She claimed the salary paid for her research was exempt from U.S. tax under Article 18 of the U.S.-Russia tax treaty, reporting it as non-taxable on Forms 1040NR-EZ for 2010 and 2011.
- The IRS determined her payments were taxable wages, not treaty-exempt grants, and assessed taxes and accuracy-related penalties.
- Kramarenko challenged the tax and penalties in Tax Court, leading to the current decision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MUSC salary was exempt as a grant under Art.18 | Salary was a grant for training, thus tax-exempt under the Treaty | Payments were compensation for labor, not a grant; taxable under Art. 14 | Salary was compensation for services, not a grant; not exempt under Treaty |
| Whether Kramarenko is liable for accuracy-related penalties | Innocent mistake, reasonable cause, and good faith for claiming exemption | Substantial understatement without reasonable cause or good faith | Penalties apply: no reasonable cause or good faith shown |
Key Cases Cited
- Welch v. Helvering, 290 U.S. 111 (U.S. 1933) (taxpayers bear the burden of proof in contesting tax determinations)
- Bingler v. Johnson, 394 U.S. 741 (U.S. 1969) (distinguishes tax-exempt fellowships from taxable compensation when there is a quid pro quo)
- Baturin v. Commissioner, 31 F.4th 170 (4th Cir. 2022) (mutual exclusivity of taxable compensation and tax-exempt grants under the Treaty; identifies factors to distinguish wages from grants)