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Petitioners timely filed their joint Federal income tax
return for taxable year 2000, on April 14, 2001. On their Form
1040, U.S. Individual Income Tax Return, petitioners did not
report the amount of $9,481 received from the Fortis Co. in their
gross income. Petitioners attached a Form 8275, Disclosure
Statement, to their Form 1040. On the Form 8275, the
petitioners’ tax return preparer wrote:
W-2 issued by Fortis Insurance Co. indicates taxable income
of $9,481 the taxpayer presents that the income is comprised
of disability payments not subject to tax and that the W-2
was issued with the income coded incorrectly. The taxpayer
is attempting to resolve the issue with Fortis Insurance Co.
at the time.
Respondent issued petitioners a notice of deficiency for
taxable year 2000, in which respondent determined that
petitioners had unreported income of $9,481 and that they were
liable for a tax deficiency in the amount of $1,425.
Discussion1
Section 61(a) defines gross income as “all income from
whatever source derived,” unless otherwise provided. McClanahan
v. United States, 292 F.2d 630, 631-632 (5th Cir. 1961). 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.”
1We 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).
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