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The sole issue is whether petitioner is entitled to exclude
from gross income $5,000 paid to petitioner and Dartmouth College
by the Globe Newspaper Co., the publisher of the Boston Globe
(the Globe).
The facts are undisputed and may be summarized as follows.
When petitioner was in secondary school he delivered newspapers
for the Globe. During that time the Globe had a "Paper Route to
College" program in which petitioner participated. Under the
program, if petitioner delivered the Globe for 3 years, the Globe
would pay $5,000 toward petitioner's first-year tuition at an
accredited college or university. Petitioner delivered the Globe
for the years 1988, 1989, and 1990. Upon his graduation from
secondary school in 1994, petitioner was accepted by, and
enrolled at, Dartmouth College. On September 2, 1994, the Globe
issued a check to petitioner and Dartmouth College in the amount
of $5,000 that was applied toward petitioner's first year
tuition.
Petitioner did not include the $5,000 in gross income on his
1994 Federal income tax return. Upon examination, respondent
determined that the $5,000 was includable in gross income and
issued a notice of deficiency.
Section 61(a) defines gross income to include "all income
from whatever source derived". In view of the all inclusive
language of section 61, exclusions from income are matters of
legislative grace and are construed narrowly. Commissioner v.
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