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Hearth Home or Guardian on their 1997 tax return or attach the
Form W-2 from Hearth Home to their 1997 return.
OPINION
Petitioners contend that Guardian’s payments to petitioner
of $7,618 were nontaxable disability benefits.1
Gross income includes all income from whatever source
derived. Sec. 61(a). Exclusions from income are a matter of
legislative grace and are construed narrowly. Commissioner v.
Schleier, 515 U.S. 323, 328 (1995). Taxpayers bear the burden of
proving that they are entitled to exclude the amounts claimed.2
Rule 142(a)(1).
1 Respondent determined that petitioner received unreported
income of $9,149, the amount that Hearth Home reported on the
Form W-2 that it issued to petitioner for 1997. Of that amount,
$7,618 was disability income and $1,531 was compensation that
petitioner received from Hearth Home for the 15 days he worked in
January 1997. Petitioners do not contend that the compensation
for the 15 days is excludable from income.
2 Petitioners do not contend that the burden of proof is on
respondent under sec. 7491, nor have petitioners established that
they complied with the requirements of sec. 7491(a)(2)(A) and (B)
to substantiate items, maintain required records, and fully
cooperate with respondent's reasonable requests.
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Last modified: May 25, 2011