Garcia v. Comr., 140 T.C. No. 6 (2013)

(petitioner is a professional golfer that is a resident of Switzerland; petitioner entered into endorsement agreement with a sponsor allowing the sponsor to use petitioner's image, name and voice in return for petitioner performing personal services for the sponsor; petitioner and sponsor allocated 85 percent of petitioner's compensation to royalties and 15 percent to personal services; petitioner created LLC in U.S. to receive royalty payments and pay a portion of the royalties to another LLP established in Switzerland; petitioner did not pay tax on royalty payments, but did pay tax on personal service payments; court readjusted allocation such that it was attributable 65 percent royalties and 35 percent personal services; royalty income exempt from U.S. taxation via treaty with Switzerland; personal services payments subject to U.S. taxation).