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income pursuant to section 105(c) and (e). Alternatively,
petitioners claim that, because of the determination letter,
respondent is precluded from challenging the qualification of the
Plan under section 105. Respondent challenges the qualification
of the Plan as an accident and health plan for employees under
section 105(e), claims that the plan distributions were not
computed with reference to the nature of the injury under section
105(c)(2), claims that the Plan distributions did not constitute
payments for the permanent loss or loss of use of a member or
function of the body under section 105(c)(1), and claims that
petitioners are not entitled to rely on the determination letter.
Because we agree with respondent that the plan distributions
were not computed with reference to the nature of the injury
under section 105(c)(2), we need not consider whether the Plan
qualifies as an accident and health plan for employees under
section 105(e) or whether Plan distributions constituted payments
for the permanent loss or loss of use of a member or function of
the body under section 105(c)(1). We also agree with respondent
that petitioners are unable to rely on the determination letter.
II. Applicable Law
A. The Statute
Section 105(a) provides the general rule that amounts
received by an employee through accident or health insurance for
personal injuries or sickness shall be included in gross income
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Last modified: May 25, 2011