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U.S. 323 (1995), alleged that petitioner had causes of action
against the credit union for libel and age discrimination.
OPINION
Issue 1. Excludability of Settlement Payments
Petitioners contend that the payments received by petitioner
from the credit union pursuant to the terms of the settlement
agreement were based entirely on tort or tort type claims and
therefore all of the payments are excludable from gross income
under section 104(a)(2). To the contrary, respondent contends
that all of the payments received by petitioner are includable in
his gross income because they were made by the credit union for
reasons which rendered them subject to tax. We agree with
petitioners in part and with respondent in part. Based on this
record, we conclude that an allocation should be made.
Section 61(a) provides that, except as otherwise provided in
the Code, gross income means "all income from whatever source
derived". The Supreme Court has stated that the statutory
definition of gross income is broad and reflects Congressional
intent to exert the full measure of its taxing power and to bring
within the definition of income any accession to wealth. United
States v. Burke, 504 U.S. 229, 233 (1992). Thus, any receipt of
funds or other accession to wealth received by a taxpayer is
presumed to be gross income unless the taxpayer can establish
that the accession fits into one of the specific exclusions
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