Sandrea Maryann and Robert Maynard Woehl - Page 5




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               Respondent subsequently issued to petitioners a statutory              
          notice of deficiency determining that all the distributions,                
          except for the portion attributable to employee contributions or            
          insurance premiums, were taxable.                                           
                                     Discussion                                       
               The Commissioner’s determinations are presumed correct, and            
          generally taxpayers bear the burden of proving otherwise.1  Rule            
          142(a)(1); Welch v. Helvering, 290 U.S. 111, 115 (1933).                    
               Gross income includes all income from whatever source                  
          derived, unless excludable by a specific provision of the                   
          Internal Revenue Code.  Sec. 61(a).  The Supreme Court has held             
          that section 61 reflects Congress’s intent to use the full                  
          measure of its taxing power.  Helvering v. Clifford, 309 U.S.               
          331, 334 (1940).  Therefore, statutes granting tax exemptions               
          should be strictly construed.  Kane v. United States, 43 F.3d               
          1446, 1449 (Fed. Cir. 1994).                                                
               Section 104(a)(1) provides that gross income does not                  
          include “amounts received under workmen’s compensation acts as              
          compensation for personal injuries or sickness”.  The regulations           
          expand the scope of section 104(a)(1) to exclude also from gross            
          income amounts received under “a statute in the nature of a                 

               1Petitioner has not raised the issue of sec. 7491(a), which            
          shifts the burden of proof to the Commissioner in certain                   
          situations.  This Court concludes that sec. 7491 does not apply             
          because petitioner has not produced any evidence that establishes           
          the preconditions for its application.                                      






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