Mario O. and Elsie R. Garza - Page 8

                                        - 7 -                                         
               Section 61(a)(1) provides that gross income includes “all              
          income from whatever source derived, including (but not limited             
          to) * * * compensation for services, including fees, commissions,           
          fringe benefits, and similar items”, 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 to be taxable income, unless the taxpayer can                  
          demonstrate that an acquisition is specifically exempted from               
          taxation”).  Moreover, section 1.61-2(a)(1), Income Tax Regs.,              
          provides that “wages, salaries, commissions paid salesmen, * * *,           
          commissions on insurance premiums, * * * are income to the                  
          recipients unless excluded by law”.                                         
               “In the situation where the advances are actually loans,               
          when the repayments are offset directly by the future earned                
          commissions, then the agent will have either commission income or           
          cancellation of indebtedness income at the time of the offsets.”            
          Diers v. Commissioner, T.C. Memo. 2003-229; Cox v. Commissioner,            
          T.C. Memo. 1996-241; cf. Warden v. Commissioner, T.C. Memo. 1988-           
          165.  Although petitioner’s employment with American Life                   
          terminated in 1998, he continued to thereafter earn renewal                 






Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  Next

Last modified: May 25, 2011