- 56 -
We agree with respondent that section 119 does not allow
each of substantially all of petitioners' employees to exclude
the value of the meals from gross income.8 We start our analysis
with section 61(a). Section 61(a) includes in gross income all
income from whatever source derived, absent a contrary provision
in subtitle A of the Code (sections 1 to 1563). The definition
of gross income under section 61(a) broadly encompasses any
accession to a taxpayer's wealth. United States v. Burke,
504 U.S. 229 (1992); Commissioner v. Kowalski, 434 U.S. 77, 82-83
(1977); Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 431
(1955); Helvering v. Clifford, 309 U.S. 331, 334 (1940).
Exclusions from gross income, by contrast, are matters of
legislative grace and are construed narrowly to maximize the
taxation of any accession to wealth. United States v. Burke,
supra at 248 (Souter, J., concurring in the judgment); United
States v. Centennial Sav. Bank FSB, 499 U.S. 573, 583 (1991);
8 At the outset, we note that petitioners misinterpret a
sentence in Boyd Gaming Corp. v. Commissioner, 106 T.C. 343
(1996), in asserting that their "reasonable belief" that the full
cost of the meals are excludable from gross income under sec. 119
is enough to come within sec. 1.132-7(a)(2), Income Tax Regs.
The sentence states that "petitioners may deduct the meals' full
cost if they reasonably determine that the meals are excludable
from their employees' incomes under section 119." Id. at 353.
Taken in context, this sentence means that petitioners may deduct
the full cost of the meals if 100 percent of the meals are
excludable from gross income. Respondent also misconstrues the
breadth of this sentence. Contrary to respondent's assertion,
petitioners do not have to prove the exact number of meals
subject to sec. 119 if that section excludes 100 percent of the
meals.
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