- 7 -
of the aforementioned exceptions is contained in section 104,
which excludes from gross income certain compensation for
injuries or sickness. Section 104(a)(1) provides:
SEC. 104(a). In General.--Except in the case of amounts
attributable to (and not in excess of) deductions allowed
under section 213 (relating to medical, etc., expenses) for
any prior taxable year, gross income does not include--
(1) amounts received under workmen's compensation
acts as compensation for personal injuries or sickness
* * *
The regulations further provide that the exclusion under section
104(a)(1) applies in the case of amounts received "under a
statute in the nature of a workmen's compensation act which
provides compensation to employees for personal injuries or
sickness incurred in the course of employment." Sec. 1.104-1(b),
Income Tax Regs. Whether a statute is in the nature of workmen's
compensation depends upon whether payments under the statute are
made because of injuries sustained in the line of duty. Dyer v.
Commissioner, 71 T.C. 560, 562 (1979). Finally, of most
significance to the issue in this case, the regulations under
section 104 limit the scope of the exclusion under section
104(a)(1) as follows:
section 104(a)(1) does not apply to a retirement pension or
annuity to the extent that it is determined by reference to
the employee's age or length of service, * * * even though
the employee's retirement is occasioned by an occupational
injury or sickness. [Sec. 1.104-1(b), Income Tax Regs.]
Respondent does not dispute that the injuries suffered by
petitioner were sustained in the line of duty and indeed has
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011