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Discussion5
Respondent determined that petitioner failed to report
income in tax year 2001 in the amount of $15,8446. However,
petitioner argues that such payments were made pursuant to credit
card insurance policies and, as such, are not income. Petitioner
contends that the factual situation here is analogous to the
situation where an insured automobile is damaged in an accident.
The insurance company insuring the vehicle pays the body shop for
the cost of the repairs, and, in such a situation, the payments
do not constitute gross income to the vehicle owner.
Section 61(a) defines gross income as “all income from
whatever source derived,” unless otherwise provided. The Supreme
Court has consistently given this definition of gross income a
liberal construction “in recognition of the intention of Congress
to tax all gains except those specifically exempted.”
Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 430 (1955); see
also Roemer v. Commissioner, 716 F.2d 693, 696 (9th Cir. 1983),
revg. 79 T.C. 398 (1982) (all realized accessions to wealth are
presumed taxable income, unless the taxpayer can demonstrate that
an acquisition is specifically exempted from taxation).
5We decide the issue in this case without regard to the
burden of proof. Accordingly, we need not decide whether the
general rule of sec. 7491(a)(1) is applicable in this case. See
Higbee v. Commissioner, 116 T.C. 438 (2001).
6As discussed previously, due to concessions, the amount of
unreported income in issue is $15,248.
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