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Unreported Income
A taxpayer’s gross income includes all income from whatever
source derived, including (but not limited to) compensation for
services, gains derived from dealings in property, interest, and
dividends.6 Sec. 61(a)(1), (3), (4), (7). In the present case,
petitioner received wages of $1,972, dividends of $1,561,
interest of $1,643, a gain of $12,554.87 from the sale of Peco
stock, and a loss of $131.75 from the sale of Americo stock.
Accordingly, petitioner’s gross income for the 2000 taxable year
is $17,599.12. We sustain respondent’s determination on this
issue to the extent of this amount.
Addition to Tax Under Section 6651(a)(1)
If a Federal income tax return is not timely filed, an
addition to tax will be assessed “unless it is shown that such
failure is due to reasonable cause and not due to willful
neglect”. Sec. 6651(a)(1). A delay is due to reasonable cause
if “the taxpayer exercised ordinary business care and prudence
6 A taxpayer’s gross income also includes a refund of State
income tax in the year received to the extent that said tax was
claimed as a deduction in any prior taxable year and resulted in
a reduction in Federal income tax. See sec. 111(a); Kadunc v.
Commissioner, T.C. Memo. 1997-92. While the record indicates
that petitioner received in 2000 an income tax refund of $114
from the Commonwealth of Virginia Department of Tax, said amount
was not included in petitioner’s gross income as part of
respondent’s determination, and respondent did not raise this
matter at any time after the issuance of the notice of
deficiency. Accordingly, we do not address whether the State
income tax refund was includable in petitioner’s gross income for
the 2000 taxable year.
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Last modified: May 25, 2011