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and introduced during the Court proceeding credible evidence with
respect to the factual issue. Although neither party alleges the
applicability of section 7491(a), we conclude that the burden of
proof has not shifted with respect to the issue in the present
case.
Section 61(a) defines gross income as “all income from
whatever source derived,” 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)
(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).
It is beyond dispute that “Income from discharge of
indebtedness” is included within the broad definition of income.
Sec. 61(a)(12); sec. 1.61-12(a), Income Tax Regs. “The
underlying rationale for such inclusion is that to the extent a
taxpayer is released from indebtedness, he or she realizes an
accession to income due to the freeing of assets previously
offset by the liability.” Jelle v. Commissioner, 116 T.C. 63, 67
(2001) (citing United States v. Kirby Lumber Co., 284 U.S. 1, 3
(1931)).
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