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Respondent’s determination is presumed correct, and
petitioner bears the burden of proving otherwise. Rule 142(a);
Welch v. Helvering, 290 U.S. 111, 115 (1933).
Section 105(a) provides that amounts received by an employee
under accident or health plans funded by the employer are
included in the employee’s gross income. Section 105(c),
however, provides this exception to the general rule:
SEC. 105(c). Payments Unrelated to Absence From
Work.--Gross income does not include amounts referred
to in subsection (a) to the extent such amounts--
(1) constitute payment for the permanent loss
or loss of use of a member or function of the
body, or the permanent disfigurement, of the
taxpayer * * * and
(2) are computed with reference to the nature
of the injury without regard to the period
the employee is absent from work.
We hold that the distribution amounts are not excludable
under section 105 from petitioner’s 1993 gross income.
Petitioner received the disability payments under a long-term
disability plan (i.e., plan A) that was fully funded by the City.
The record clearly demonstrates that no funds were withheld from
petitioner’s wages and that petitioner did not pay for the plan
from other sources. Moreover, the section 105(c) exception does
not apply. Petitioner did not establish that the payments were
computed with reference to the nature of his injuries without
regard to the period he was absent from work. Beisler v.
Commissioner, 814 F.2d 1304, 1307-1308 (9th Cir. 1987), affg. en
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