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discharge, wrongful termination, and emotional distress specified
in the release.
United, at petitioner's request, did not include the $11,100
on the Form W-2 issued to petitioner for 1994. Rather, United
issued a Form 1099-MISC for the payment. On her 1994 Federal
income tax return, petitioner revealed the $11,100, but took the
position that the payment was excluded from gross income under
section 104(a)(2). Respondent determined that the payment was
not excludable.
Discussion
Section 61(a) defines gross income broadly as "all income
from whatever source derived". The Supreme Court "has given a
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). Exclusions from income are matters of
legislative grace and are construed narrowly. Commissioner v.
Schleier, 515 U.S. 323, 328 (1995); Mostowy v. United States,
966 F.2d 668, 671 (Fed. Cir. 1992). A taxpayer seeking a
deduction or exclusion "must be able to point to an applicable
statute and show that he comes within its terms." New Colonial
Ice Co. v. Helvering, 292 U.S. 435, 440 (1934); see also
Commissioner v. Schleier, supra.
Section 104(a)(2) excludes from gross income "the amount of
any damages received (whether by suit or agreement and whether as
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