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We hold the following circumstances dispositive. During
1991, Mr. Crandall received payments from the Kodak Welfare
Benefit Trust totaling $5,491.52. Payments from the Kodak
Welfare Benefit Trust are made exclusively to satisfy obligations
under the Kodak LTD Plan. Kodak's Long Term Disability booklet
states that the Plan is paid for entirely by Kodak and that there
is no cost to employees. The deductions of 60 cents from Mr.
Crandall's weekly earnings were for Kodak's Sickness Allowance
Plan, not the Kodak LTD Plan. Petitioners did not argue, nor
does the record show, that Kodak's contributions to the Plan were
included in Mr. Crandall's gross income, or that the payments he
received qualify under the exception provided for under section
105(c).2
Under the circumstances of this case, sections 61 and 105
clearly require petitioners to include in income for Federal
income tax purposes the disability payments that Mr. Crandall
received during 1991.
Decision will be entered
for respondent.
2 Both the employee handbook and the booklet state that
payments under the Plan are calculated as a percentage of the
employee's base wage or annual salary rate, less certain other
benefits.
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