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The settlement agreement was signed by petitioner and her
attorney.
Petitioner filed a tax return for taxable year 2000. In
that return, petitioner excluded from her gross income the
$50,000 that she received from Universal under the settlement
agreement. In the notice of deficiency, respondent determined
that petitioner is not entitled to exclude from her gross income
the settlement amount at issue.
Discussion
The Commissioner's deficiency determinations in the notice
of deficiency are presumed correct and, generally, taxpayers bear
the burden of proving that the Commissioner's determinations are
incorrect. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115
(1933). Under certain circumstances, however, section 7491(a)
may shift the burden to the Commissioner. The issue in this case
is a question of law, and the Court decides the issue without
regard to the burden of proof. Therefore, section 7491(a) is
inapplicable.
Taxability of Payment Petitioner Received
As a general rule, gross income includes income from
whatever source derived. Sec. 61(a). This definition is to be
construed broadly and was designed by Congress to "exert * * *
'the full measure of its taxing power.'" Commissioner v.
Glenshaw Glass Co., 348 U.S. 426, 429 (1955) (quoting Helvering
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