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I consent to the immediate assessment and collection of any
increase in tax and penalties plus interest shown * * *. I
understand that by signing this waiver, I won’t be able to
contest these changes in the U.S. Tax Court unless
additional tax is determined to be due for 2001.
Petitioners did not execute the “total agreement statement”;
an assessment was made; and collection notices were sent to
petitioners. On September 13, 2004, the assessment was abated in
light of the filing of the petition in this Court.
Subsequently, petitioner contacted the local Appeals officer
handling the case and expressed his agreement to the deficiency
proposed in the June 1, 2004, letter. Petitioner was told that
his acceptance was not timely. Nonetheless, petitioner paid the
revised deficiency of $5,681 which amount was posted to
petitioners’ 2001 account as an “advance payment of determined
deficiency”.
Discussion
Section 61(a) defines gross income to mean all income from
whatever source derived. Gambling winnings, whether reported or
not, are includable in gross income. Paul v. Commissioner, T.C.
Memo. 1992-582. In the case of an individual, section 62(a)
defines adjusted gross income as gross income less certain
deductions, including deductions attributable to a trade or
business carried on by the taxpayer. Sec. 62(a)(1). If
petitioner’s gambling activity constituted a trade or business,
his gambling losses would be deductible from gross income in
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Last modified: May 25, 2011