- 9 - 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”.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011