- 10 - 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 personalPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011