                       T.C. Memo. 1998-51



                     UNITED STATES TAX COURT

                DANIEL E. GODFREY, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent


     Docket No. 9453-97.                    Filed February 9, 1998.


     Daniel E. Godfrey, pro se.

     Louise R. Forbes, for respondent.


                       MEMORANDUM OPINION


     POWELL, Special Trial Judge: This case was heard pursuant to

section 7443A(b)(3) and Rules 180, 181, and 182.1

     Respondent determined a deficiency in petitioner's 1994

Federal income tax in the amount of $751.   Petitioner resided in

Winthrop, Massachusetts, at the time the petition was filed.



     1
          Unless otherwise indicated, section references are to
the Internal Revenue Code in effect for the year in issue. Rule
references are to the Tax Court Rules of Practice and Procedure.
                                 - 2 -

     The sole issue is whether petitioner is entitled to exclude

from gross income $5,000 paid to petitioner and Dartmouth College

by the Globe Newspaper Co., the publisher of the Boston Globe

(the Globe).

     The facts are undisputed and may be summarized as follows.

When petitioner was in secondary school he delivered newspapers

for the Globe.   During that time the Globe had a "Paper Route to

College" program in which petitioner participated.      Under the

program, if petitioner delivered the Globe for 3 years, the Globe

would pay $5,000 toward petitioner's first-year tuition at an

accredited college or university.    Petitioner delivered the Globe

for the years 1988, 1989, and 1990.      Upon his graduation from

secondary school in 1994, petitioner was accepted by, and

enrolled at, Dartmouth College.    On September 2, 1994, the Globe

issued a check to petitioner and Dartmouth College in the amount

of $5,000 that was applied toward petitioner's first year

tuition.

     Petitioner did not include the $5,000 in gross income on his

1994 Federal income tax return.    Upon examination, respondent

determined that the $5,000 was includable in gross income and

issued a notice of deficiency.

     Section 61(a) defines gross income to include "all income

from whatever source derived".    In view of the all inclusive

language of section 61, exclusions from income are matters of

legislative grace and are construed narrowly.      Commissioner v.
                                 - 3 -

Schleier, 515 U.S. 323, 328 (1995); Mostowy v. United States, 966

F.2d 668, 671 (Fed. Cir. 1992).    A taxpayer seeking an exclusion

from income must be able to point to an applicable statute and

show that he comes within its terms.

     Petitioner originally contended that section 117 excluded

the Globe payment from income.    Section 117(a) excludes from

income "any amount received as a qualified scholarship".       As

petitioner now recognizes, however, section 117 does not apply to

any amount "which represents payment for * * * services by the

student".   Sec. 117(c).   There is no question that petitioner and

the Globe understood that the $5,000 was contingent on

petitioner's rendering services.    Therefore, as petitioner

recognizes, section 117 is inapplicable here.

     Petitioner also contends that the payment was an award and

exempt from gross income under section 74(b).       To understand this

argument, we turn first to section 74(a) which provides that, as

a general rule, "gross income includes amounts received as prizes

and awards."   Section 74(b), however, provides an exception to

the general rule in certain circumstances where the award is

transferred to a charitable institution.       While we have no doubt

that Dartmouth College is a qualified institution, we seriously

question whether Congress intended for this provision to include

"transfers" in payment of tuition.       Furthermore, section 74(b)

applies to "amounts received * * * primarily in recognition of

religious, charitable, scientific, educational, artistic,
                               - 4 -

literary, or civic achievement".   While we have no doubts,

particularly in light of New England winter mornings, that the

Globe's payment was in recognition of Herculean efforts, we

cannot classify those efforts within any of the enumerated

achievements to which section 74(b) is directed.     See Hornung v.

Commissioner, 47 T.C. 428, 436-437 (1967).     We further note that

under section 74(b)(1), the recipient must have been selected

"without any action on his part to enter the contest or

proceeding".   We are not pursuaded that petitioner played no role

in initiating the process that led to the Globe's payment.

Isenbergh v. Commissioner, 31 T.C. 1046, 1051-1053 (1959).     In

sum, we must also reject petitioner's section 74(b) argument.

Therefore, respondent's determination is sustained.

                                            Decision will be entered

                                       for respondent.
