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Discussion
Petitioner has neither claimed nor shown that he satisfied
the requirements of section 7491(a) to shift the burden of proof
to respondent. Hence, petitioner bears the burden of proving that
respondent’s deficiency determinations are incorrect. See Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).
It is well established that, pursuant to section 61(a), gross
income includes all income from whatever source derived unless
otherwise excluded by the Internal Revenue Code. See Commissioner
v. Glenshaw Glass Co., 348 U.S. 426, 429-431 (1955). Exclusions
from gross income are construed narrowly. Commissioner v.
Schleier, 515 U.S. 323, 327-328 (1995). Generally, amounts
received for damages are excludable from gross income if: (1) The
taxpayer demonstrates that the underlying cause of action giving
rise to the recovery is based upon tort or tort type rights, and
(2) the taxpayer shows that the damages were received on account
of personal injuries or sickness. Id. at 336.
The specific exclusion upon which petitioner relies is found
in section 104. Section 104, as relevant here, provides:
SEC. 104. COMPENSATION FOR INJURIES OR SICKNESS.
(a) In General.--Except in the case of amounts
attributable to (and not in excess of) deductions
allowed under section 213 (relating to medical, etc.,
expenses) for any prior taxable year, gross income does
not include--
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