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In preparing their 1999 joint Federal income tax return,
petitioners reported $93,482 of taxable wages. Petitioners
excluded $10,170, representing the amount petitioner received
from the County of Los Angeles for unused vacation and sick
leave.4
Section 61 provides in part:
SEC. 61. GROSS INCOME DEFINED.
(a) General Definition.–-Except as otherwise provided
in this subtitle, gross income means all income from
whatever source derived, including (but not limited to) the
following items:
(1) Compensation for services, including fees,
commissions, fringe benefits, and similar items;
Section 1.61-1(a), Income Tax Regs., further provides that
“Gross income means all income from whatever source derived,
unless excluded by law.” Specifically, “Wages, [and] salaries
* * * are income to the recipients unless excluded by law.” Sec.
1.61-2(a)(1), Income Tax Regs. Gross income is an inclusive term
with broad scope, designed by Congress to “exert * * * ‘the full
measure of its taxing power.’” Commissioner v. Glenshaw Glass
Co., 348 U.S. 426, 429 (1955) (quoting Helvering v. Clifford, 309
U.S. 331, 334 (1940)). A taxpayer’s accession of wealth is gross
4 Respondent, in “Our Proposed Changes To Your 1999 Form
1040" issued to petitioners with the notice of deficiency,
asserted that $103,651 of taxable wages was reported to
respondent. As a result, respondent determined an increase of
$10,169 to petitioners’ gross income. Respondent does not
dispute the difference of $1 and does not intend to deviate from
the statutory notice of deficiency.
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Last modified: May 25, 2011