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The first issue for decision is whether petitioner received
and failed to report income during the taxable years in issue.
Respondent's determinations in the statutory notice of deficiency
are presumed to be correct, and petitioner bears the burden of
proving otherwise. Rule 142(a); Welch v. Helvering, 290 U.S.
111, 115 (1933).
Section 61(a) includes in gross income all income from
whatever source derived including, but not limited to,
compensation for services. Sec. 61(a)(1). At trial, petitioner
admitted that he earned the amounts reported on the Forms W-2 and
determined by respondent in the statutory notice of deficiency to
be includable in his gross income. Petitioner claims, however,
that he is entitled to a deduction for the amounts of his wages
which were allegedly garnished by order of a Mississippi State
court.
Based on the record, we find that petitioner has failed to
prove any error in respondent's determinations. According to his
testimony, his wages were garnished to repay loan proceeds which
he obtained by forging the signature of another person. We find
his claim to a deduction for amounts which he is required to pay
to such person to be without merit. An employer's payment of an
obligation of the taxpayer is equivalent to the taxpayer's
receipt of income in the amount so paid. Old Colony Trust Co. v.
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Last modified: May 25, 2011