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Petitioner excluded certain "military allowances" from gross
income for the 1995 tax year in the amount of $16,221.56.
In a notice of deficiency dated April 8, 1998, respondent
determined that the $16,221.56 amount is includable in
petitioner's 1995 taxable income. This amount represents
petitioner's purported 1995 "allowance" exclusions from his JROTC
income. The inclusion of this amount results in computational
adjustments to petitioner's medical and miscellaneous deductions.
Petitioner contends that he is entitled to exclude
$16,221.56 of JROTC income from gross income for the 1995 tax
year pursuant to 10 U.S.C. section 2031(d) and section 134.
Gross income includes all income from whatever source
derived. See sec. 61. Military pay received by members of the
U.S. Armed Forces is generally includable in gross income. See
sec. 1.61-2(a)(1), Income Tax Regs.
Congress may specifically exempt certain items from
inclusion in gross income. See Commissioner v. Glenshaw Glass
Co., 348 U.S. 426, 430 (1955). Certain military compensation,
such as compensation received by members of the U.S. Armed Forces
serving in combat zones, is excluded from gross income. See sec.
112. Additionally, military subsistence and uniform allowances
and other amounts received as commutation of quarters are
excluded from gross income. See sec. 1.61-2(b), Income Tax Regs.
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