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petitioner failed to report Schedule C nonemployee compensation
of $26,738,3 that petitioner is not entitled to claim Schedule C
automobile expenses or office expenses of $8,910 and $3,600,
respectively, and that petitioner is subject to self-employment
tax of $6,365.
OPINION
A. Unreported Income
Section 61(a) provides that “gross income means all income
from whatever source derived” except as otherwise provided. The
definition of gross income is broad, Commissioner v. Glenshaw
Glass Co., 348 U.S. 426, 429-430 (1955), and exclusions from
gross income are narrowly construed, United States v. Burke, 504
U.S. 229, 248 (1992); United States v. Centennial Sav. Bank FSB,
499 U.S. 573, 583 (1991).
Respondent’s determinations in the notice of deficiency are
presumed correct, and petitioner must prove those determinations
wrong in order to prevail.4 Rule 142(a); Welch v. Helvering, 290
U.S. 111, 115 (1933). As relevant to the present case,
petitioner asserts that the settlement agreement provided for
3 This amount comprises Form 1099 income of $25,766 from
American, $175 from Capitol, and $797 from Life USA.
4 Petitioner does not contend that sec. 7491(a) is
applicable to this case. Sec. 7491(a) is in any event
inapplicable because of petitioner’s failure to comply with the
substantiation and recordkeeping requirements of sec. 7491(a)(2)
or to introduce credible evidence within the meaning of sec.
7491(a)(1).
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