For the backstory on the remand that triggered Vitaly Nikolaevich Baturin, T. C. Memo. 2026-12, see my blogpost “A Bad Day for the Russians,” 4/8/22.

Once 4 Cir shipped VitNik’s case back to Judge David Gustafson, there were three (count ’em, three) more stips of fact, after which Judge Gustafson decided he didn’t need no trial (Judge Gustafson is too well-bred to apply the opprobrious adjective that Alfonso Bedoya y Díaz de Guzmán^[ never said).

VitNik never raised his Section 1441 withholding argument in Tax Court nor at 4 Cir, and anyway withholding doesn’t equal liability.  VitNik was supervised and subject to evaluation. Had the laboratory not hired him, they would have hired someone else. Any IP or product he generated belonged to the laboratory, not him. The project started before he was hired and continued after he left. Nonresidency doesn’t provide nontaxability. And VitNik signed an employment agreement explicitly subject to the terms of the laboratory’s administrative manual, pursuant to which his employment was contingent upon results.

But the ultimate question is “Did the grantor receive a substantial quid pro quo from the grantee’s work?”

“Revenue Ruling 80-36, 1980-1 C.B. at 368, states the general principle that tax exemption ‘does not extend to professional researchers receiving compensation for performing research services,’ a generality that includes Dr. Baturin. The Revenue Ruling explains that a researcher may be exempt from tax where he is paid for effort ‘in the pursuit of a specific research goal,’ where his ‘work is not subject to direction or supervision by any other person, and [he] is entitled, but not required to publish the results of the research,’ and where ‘[n]o other person has any right to the product of [his] research,’ id., but none of that describes Dr. Baturin. Rather, in the words of the Revenue Ruling, we hold that Dr. Baturin was ‘performing valuable research services under the supervision of the grantor [i.e., Jefferson Lab] that are primarily for the benefit of the grantor of the payments,’ a circumstance in which the payments are subject to tax.’ id.” T. C. Memo. 2026-12, at p. 17.