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Section 1.1-1, Income Tax Regs., provides further as
follows:
Sec. 1.1-1. Income tax on individuals.--(a)
General rule. (1) Section 1 of the Code imposes an
income tax on the income of every individual who is a
citizen or resident of the United States * * *.
* * * * * * *
(b) Citizens or residents of the United States
liable to tax. In general, all citizens of the United
States, wherever resident, * * * are liable to the income
taxes imposed by the Code whether the income is received
from sources within or without the United States. * * *
The Supreme Court has defined income under section 61
broadly, noting that Congress intended to tax as income “all
gains except those specifically exempted.” Commissioner v.
Glenshaw Glass Co., 348 U.S. 426, 429-430 (1955).
In Commissioner v. Schleier, 515 U.S. 323, 327-328 (1995),
the Supreme Court noted that because of the broad and inclusive
nature of section 61(a), an income item must be included in
income for Federal income tax purposes unless it is explicitly
excluded by another provision of the Code.
Petitioners point out that section 61(a) uses the word
“source” but that section 61 does not go on to define the
“sources” which produce income taxable by the United States.
Petitioners therefore conclude that in order to identify the
“sources” of income that are taxable reference must be made to
the income “sourcing” rules of sections 861-865 and to
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