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B. Discussion10
1. Gross income
Section 61 provides that “gross income means all income from
whatever source derived”. Gross income is an inclusive term with
broad scope, designed by Congress to “exert * * * ‘the full
measure of its taxing power.’” Commissioner v. Glenshaw Glass
Co., 348 U.S. 426, 429 (1955) (quoting Helvering v. Clifford, 309
U.S. 331, 334 (1940)). Annuities and pensions are enumerated
among the items of income included under section 61. Sec.
61(a)(9), (11).
Statutory exclusions from income are matters of legislative
grace and are narrowly construed. Commissioner v. Schleier, 515
U.S. 323, 328 (1995); Mostowy v. United States, 966 F.2d 668, 671
(Fed. Cir. 1992). Further, “exemptions from taxation are not to
be implied; they must be unambiguously proved.” United States v.
Wells Fargo Bank, 485 U.S. 351, 354 (1988). Taxpayers seeking an
exclusion from income must demonstrate they are eligible for the
exclusion and bring themselves “within the clear scope of the
exclusion.” Dobra v. Commissioner, 111 T.C. 339, 349 n.16
(1998).
Petitioner’s primary argument is that the ERS payments are
excludable from gross income because they are “disability”
10 Because the Court decides the issues in this case
without regard to the burden of proof, sec. 7491 is inapplicable.
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