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Petitioners timely petitioned this Court for redetermination
of the deficiencies set forth in respondent’s notice. In their
petition, petitioners contested respondent’s determinations and
further alleged that respondent erred in failing to determine
that petitioners were entitled to a refund of overpayments of
income taxes for 1993 and 1994 resulting from petitioners’
reporting of the severance payments as gross income.
OPINION
Gross income means all income from whatever source derived,
unless excluded by law. See sec. 61(a); sec. 1.61-1(a), Income
Tax Regs. Exclusions from income are construed narrowly, and
taxpayers must bring themselves within the clear scope of the
exclusion. See Commissioner v. Schleier, 515 U.S. 323, 336-337
(1995); United States v. Burke, 504 U.S. 229, 233 (1992);
Mayberry v. United States, 151 F.3d 855, 859 (8th Cir. 1998);
Dobra v. Commissioner, 111 T.C. 339, 349 n.16 (1998) (citing
Graves v. Commissioner, 89 T.C. 49, 51 (1987), supplementing 88
T.C. 28 (1987)). Petitioner bears the burden of proof with
respect to whether he is entitled to an exclusion. See Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).
Section 104(a)(2) excludes from gross income “the amount of
any damages received (whether by suit or agreement and whether as
lump sums or as periodic payments) on account of personal
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