-10-
to his return, however, in which he stated: “I received $500,000
* * * as settlement of a lawsuit for violation of my civil
rights.”
On January 28, 2003, respondent mailed to petitioner a
notice of deficiency in which respondent increased petitioner’s
gross income for 1999 by the full amount of the settlement
proceeds, including the amount petitioner paid to his attorney.
On February 7, 2003, petitioner’s letter to the Court was filed
as his imperfect petition. The Court ordered petitioner to file
an amended petition by May 16, 2003. On May 13, 2003,
petitioner’s amended petition contesting the notice of deficiency
was filed.
OPINION
In general, the Commissioner’s determination of a deficiency
is presumed correct, and the taxpayer bears the burden of proving
otherwise. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115
(1933). In this case, petitioner does not contend that section
7491(a), which shifts the burden of proof to the Commissioner if
its requirements are met, applies, and petitioner has not
produced evidence to show he meets the requirements of section
7491(a). The burden of proof, therefore, remains on petitioner.
A. Section 104(a)(2)
Section 61(a) includes in gross income “all income from
whatever source derived” unless excluded by a specific provision
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