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payments from Southeast during 1999 of “more than $1,000. He
admitted that he did not keep any records as to the amounts paid
to him by Southeast during 1999.
Discussion
In general, the determinations of the Commissioner in a
notice of deficiency are presumed correct, and the burden is on
the taxpayer to show that the determinations are incorrect. Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).6
A. Unreported Income
Gross income includes all income from whatever source
derived. Sec. 61(a). Section 61(a)(1) specifically includes
income derived from compensation for services, including fees,
commissions, fringe benefits, and similar items. A taxpayer is
required to maintain records sufficient to establish all items of
income required to be shown on the taxpayer’s tax return. See
sec. 6001; sec. 1.6001-1(a), Income Tax Regs.
Per diem payments may be excluded from gross income if the
requirements of section 1.162-17(b)(1), Income Tax Regs., are
satisfied. See Baugh v. Commissioner, T.C. Memo. 1996-70.
Section 1.162-17(b)(1), Income Tax Regs., provides:
6 Because petitioners failed to introduce any credible
evidence, they failed to meet the requirements of sec. 7491(a),
as amended, so as to place the burden of proof on respondent with
respect to any factual issue relevant to ascertaining liability
for the tax deficiency in issue. Accordingly, petitioners bear
the burden of proof.
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