Antim G. and Jane V. Straus - Page 5




                                         -4-                                          
                                     Discussion                                       
               The Commissioner’s determinations are presumed correct, and            
          taxpayers generally bear the burden of proving otherwise.  Welch            
          v. Helvering, 290 U.S. 111, 115 (1933).  Petitioners did not                
          argue that section 7491 is applicable in this case, nor did they            
          establish that the burden of proof should shift to the                      
          respondent.  Moreover, the issue involved in this case, inclusion           
          of items in gross income, is a legal one to be decided on the               
          record without regard to the burden of proof.  Petitioners,                 
          therefore, bear the burden of proving that respondent’s                     
          determination in the notice of deficiency is erroneous.  See Rule           
          142(a); Welch v. Helvering, supra at 115.                                   
               Section 61(a) provides that gross income means all income              
          from whatever source derived, including “Interest” and “Income              
          from life insurance.”  Sec. 61(a)(4), (10).  The sole exception             
          to the inclusion of income from life insurance lies in section              
          101, which specifically excludes from gross income amounts                  
          received “under a life insurance contract, if such amounts are              
          paid by reason of the death of the insured.”  Sec. 101(a)(1).               
          Section 72(a) provides that gross income includes any amount                
          received as an annuity under a life insurance contract.  Given              
          these statutory predicates, there is no authority upon which we             
          may declare the distributions at issue in this case exempt from             
          inclusion in gross income and accordingly, exempt from taxation.            







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