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collection of a prebankruptcy Federal tax liability.8 Therefore,
the issue before us is a question of petitioners’ Federal income
tax liability under the Internal Revenue Code, Title 26, United
States Code, and not a question under the Bankruptcy Code, Title
11, U.S. Code.
Respondent argues that the $7,650 settlement payment is
includable in petitioners’ gross income for 1999. For the
reasons stated below, we agree.
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 in scope, Commissioner v.
Glenshaw Glass Co., 348 U.S. 426, 429-30 (1955), and exclusions
from gross income are narrowly construed, United States v. Burke,
504 U.S. 229, 248 (1992) (Souter, J., concurring in judgment);
Commissioner v. Jacobson, 336 U.S. 28, 49 (1949).
As relevant to the present case, section 104(a)(2) excludes
from gross income “the amount of any damages (other than punitive
damages) received (whether by suit or agreement and whether as
lump sums or as periodic payments) on account of personal
8 See Swanson v. Commissioner, 65 T.C. 1180, 1184 (1976),
where this Court observed that an action brought for
redetermination of a deficiency “has nothing to do with
collection of the tax nor any similarity to an action for
collection of a debt”.
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