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In December 2002, shortly before trial herein, there was
issued to petitioner on behalf of Champion a Form W-2c, Corrected
Wage and Tax Statement for 1998. At the same time, there was
filed with respondent on behalf of Champion a Form W-3c,
Transmittal of Corrected Wage and Tax Statements for 1998. Both
statements reflected that, during 1998, Champion had paid wages
to petitioner in the total amount of only $27,415.
On December 27, 2002, petitioner filed with respondent his
original 1998 individual Federal income tax return, which the
accountant had prepared. On that return, petitioner reported
total wages received in 1998 from Champion of only $27,415.
Also on December 27, 2002, there was filed with respondent
on behalf of Champion an amended 1998 corporate Federal income
tax return for 1998, reflecting a $102,126 decrease in the
deduction claimed for wages paid to petitioner.1
OPINION
Taxable Wage Income
Section 61(a) defines gross income as “all income from
whatever source derived,” including compensation for services.
The Supreme Court has held that gross income includes “undeniable
accessions to wealth, clearly realized, and over which the
1 $129,541 (wage deduction claimed on Champion’s original
1998 corporate Federal income tax return) less $27,415 (wage
deduction claimed on Champion’s amended 1998 corporate Federal
income tax return) equals $102,126.
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