- 8 - excludable from petitioner’s gross income under section 104(a)(1). We agree with respondent. Section 61(a) broadly defines gross income as “all income from whatever source derived”. Compensation for services is expressly included within this broad definition. See sec. 61(a)(1). Under section 104(a)(1), amounts received as worker’s compensation are excluded from gross income. However, the Court has held that “statutes granting tax exemptions should be strictly construed.” Kane v. United States, 43 F.3d 1446, 1449 (Fed. Cir. 1994); see Commissioner v. Jacobson, 336 U.S. 28, 39 (1949). A taxpayer seeking a deduction or exclusion from gross income “must be able to point to an applicable statute and show that he comes within its terms.” New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934). Section 104(a)(1) excludes from gross income “amounts received under workmen's compensation acts as compensation for personal injuries or sickness”. Section 1.104-1(b), Income Tax Regs., includes amounts received by an employee “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.” Therefore, in order to resolve this matter, we must consider the relevant provisions of the worker’s compensation act under Michigan law and determinePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011