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Section 61(a) defines gross income as “all income from
whatever source derived,” including gambling, 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.” Commissioner v. Glenshaw Glass Co., 348
U.S. 426, 430 (1955); see also Roemer v. Commissioner, 716 F.2d
693, 696 (9th Cir. 1983) (all realized accessions to wealth are
presumed taxable income, unless the taxpayer can demonstrate that
an acquisition is specifically exempted from taxation), revg. 79
T.C. 398 (1982).
Petitioner stipulated and admitted at trial that during
taxable year 1999, he received gambling winnings of $50,000 at
the Grand Victoria Casino. Petitioner did not report the
aforesaid winnings on his 1999 Federal income tax return.
Petitioner’s reliance on the advice of the Grand Victoria
Casino’s pit boss is misplaced. This Court has repeatedly held
that gambling winnings are includable in the taxpayer’s gross
income for the taxable year in which the winnings were received.
See Petty v. Commissioner, T.C. Memo. 2004-144; see also Lutz v.
Commissioner, T.C. Memo. 2002-89; Sadlier v. Commissioner, T.C.
Memo. 1997-45. Therefore, respondent’s determination as to
petitioner’s unreported income is sustained.
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Last modified: May 25, 2011