The Sixteenth Amendment to the Constitution of the United States gives authority to Congress to tax income. The Internal Revenue Service defines revenue via a term ‘Gross Income’. In Chapter 26 of the Federal Code (Chapter 26 is the Internal Revenue Code) Section 61, Congress defines gross income as “… all income from whatever source derived…”. This means even the penny you pick up off the ground is considered income.
Chapter 26 of the Federal Code
Chapter 26 of the Federal Code is commonly referred to as the Internal Revenue Code of the United States. It is used to set the regulations and rules used by the IRS for the various tax compliance issues.