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employer, or are attributable to employer contributions which
were not includable in the employee's gross income. See sec.
104(a)(3); Trappey v. Commissioner, supra; sec. 1.104-1(d),
Income Tax Regs.
Sections 105(a) and 104(a)(3) are related in that the two
sections "deal with the same subject matter and are in substance
but two sides of the same coin." Winter v. Commissioner, 36 T.C.
14, 18 (1961), affd. 303 F.2d 150 (3d Cir. 1962). Under section
105(a) amounts received by an employee through accident or health
insurance for personal injuries or sickness must be included in
gross income to the extent such amounts are attributable to
contributions by the employer which were not included in the
employee's gross income or are paid by the employer, unless such
amounts are excluded under section 105(b) or (c). See sec. 105;
sec. 1.105-1(a), Income Tax Regs. Only section 105(c) is
relevant here.
Section 106 "works in conjunction with section 104(a)(3) and
section 105(a)" by excluding from an employee's gross income the
cost of employer-provided coverage under an accident or health
plan. Rabideau v. Commissioner, T.C. Memo. 1997-230; see sec.
1.106-1, Income Tax Regs. If employer contributions are excluded
from gross income under section 106, then the benefits
attributable to such contributions are governed by section
105(a), rather than by section 104(a)(3). Petitioner bears the
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