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liberal construction to this broad phraseology in recognition of
the intention of Congress to tax all gains except those
specifically exempted." Commissioner v. Glenshaw Glass Co., 348
U.S. 426, 430 (1955). Gross income specifically includes
compensation for services and income from discharge of
indebtedness. Sec. 61(a)(1), (12). A payment by an employer in
satisfaction of a liability of an employee generally constitutes
taxable income to the employee. Old Colony Trust Co. v.
Commissioner, 279 U.S. 716, 729-730 (1929); Huff v. Commissioner,
80 T.C. 804, 814-815 (1983). While Congress may provide for
exclusions from gross income, such exclusions are matters of
legislative grace and are construed narrowly. Mostowy v. United
States, 966 F.2d 668, 671 (Fed. Cir. 1992); see also Silverman v.
Commissioner, 28 T.C. 1061, 1067-1068 (1957), affd. 253 F.2d 849
(8th Cir. 1958). A taxpayer seeking a deduction or exclusion
"must be able to point to an applicable statute and show that he
comes within its terms." See New Colonial Ice Co. v. Helvering,
292 U.S. 435, 440 (1934).
Petitioner has not argued that any specific statutory
exclusions apply to exempt the payment from gross income, and we
are not aware of any that apply. Petitioner, however, argues
that he has been unfairly treated because military personnel in
other professions, such as nurses and doctors, receive tax exempt
educational subsidies. Assuming arguendo that petitioner's
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