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petitioners’ 2003 gross income on the grounds that they never
received any payments (“checks”) from Primerica during the year
at issue, and because she ended her affiliation with Primerica
“in late 2002,” the monthly figures for 2003 submitted to her and
respondent by Primerica had to have been falsified.
Discussion
The determinations of the Commissioner in a notice of
deficiency are presumed correct, and the burden is on the
taxpayer to prove that the determinations are in error. Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). As the
issue in this case is legal, that is, whether income generated by
petitioner wife’s commission account is includable in
petitioners’ gross income, we decide this case without
consideration of the burden of proof. Sec. 7491.
The first issue presented in this case is whether Mrs.
Harper earned income based on commissions that were not paid
directly to her “in a check” but, rather, were diverted or
applied to offset a negative balance in her commission account.
Section 61(a)(1) provides that gross income includes “all
income from whatever source derived, including (but not limited
to) * * * Compensation for services, including fees, commissions,
fringe benefits, and similar items”, unless otherwise provided.
The Supreme Court has consistently given this definition of gross
income a liberal construction “in recognition of the intention of
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