You can't get around taxes by claiming the company reward was a gift. The IRS will let it slide if your boss hands out a turkey, ham or nominally priced item at holiday time. But if you're given cash, a gift certificate or an item you can easily exchange for cash, you must include the gift's value as extra salary or wages regardless of the amount involved.

Heck, even if you're out of a job you're out of tax luck. Unemployment benefits are taxable.

Here are some more instances where the taxman wants his cut:

• Alimony received. • Awards, prizes, contest winnings and gambling proceeds. • Back pay awards. • Notary public fees. • Patent, royalties, license receipts and any infringement compensation. • Profit on sales between family members. • Punitive damages. • Residence sale profit above the exclusion limits. • Severance pay. • Strike benefits.

In the tax clear
There are few sources of income that are not taxable. Unfortunately, many represent money you wish you didn't need to get in the first place.

Here are the types of income the IRS can't touch:

• Black lung disease benefits. • Dependent care assistance paid by the military to miltary personnel. • Disaster relief grants. • Casualty insurance and other reimbursements. • Child support payments. • Compensatory damages awarded for physical injury or physical sickness. • Damages for emotional distress due to a physical injury or physical sickness. • Disability payments if you paid the premiums on the policy with already taxed dollars. • Foster care payments when the care is for youngsters. • Interest on certain state or local government obligations. • Supplemental Security Income (SSI). • Veterans' benefits. • Welfare benefits. • Workers' compensation.

Retired law enforcement officers get a break. Effective with the 2007 tax year, a retired public safety officer doesn't have to pay taxes on some distributions from an eligible government retirement plan as long as the retirement money is transferred directly to pay premiums for accident or health insurance for the former officer, a spouse and dependents.

And while an inheritance of property is not a taxable event, you'll owe Uncle Sam on any income the bequest produces.

Navigating murky tax waters
As with almost every tax situation, it's not always clear-cut when it comes to taxable versus nontaxable income.

For example, the tax laws treat various scenarios regarding life insurance payments differently. If you surrender a life insurance policy for cash, you must include as taxable income any proceeds that are more than the cost of the policy. But life insurance proceeds paid to you as the beneficiary of the insured person are not taxable unless the policy was turned over to you for a price.

Another instance where income may or may not be taxable is scholarship or fellowship grant money. If you are a candidate for a degree, you can exclude from income amounts you receive as a qualified scholarship or fellowship and used to pay tuition, fees or buy books or other required educational equipment. Grant money used for room and board, however, is taxable.

These examples are not all-inclusive. So if you have an unusual income situation, check out the IRS rules. You may -- or may not -- have to pay taxes on the money.

A complete list of what the IRS considers taxable or nontaxable is available in Publication 525, Taxable and Nontaxable Income.

Freelance writer Kay Bell writes Bankrate's tax stories from her Austin, Texas, home. She also writes two tax blogs, Bankrate's Eye on the IRS, and Don't Mess With Taxes.