- 4 -
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.
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: November 10, 2007