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Section 61 provides that gross income includes "all income
from whatever source derived," unless otherwise provided. The
Supreme Court has consistently given this definition of gross
income a liberal construction "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); see
also Roemer v. Commissioner, 716 F.2d 693, 696 (9th Cir. 1983),
revg. 79 T.C. 398 (1982) (all realized accessions to wealth are
presumed taxable income, unless the taxpayer can demonstrate that
an acquisition is specifically exempted from taxation).
Moreover, section 1.61-2(a)(1), Income Tax Regs., provides that
"wages, salaries, commissions paid salesmen * * * are income to
the recipients unless excluded by law".
The amounts petitioner received from his employer
represented payments for his services. Those amounts represented
compensation for services rendered. Those amounts are includable
in gross income. Whatever rights petitioner surrendered or
forfeited in his employment relationship with the company have no
bearing on the tax consequences of the amounts paid to petitioner
for his services. Petitioner's argument, therefore, is rejected,
and respondent is sustained.
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Last modified: May 25, 2011