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statute in the nature of a worker’s compensation act pursuant to
section 1.104-1(b), Income Tax Regs.
Petitioners contend that petitioner received disability
pension amounts from the city in accordance with section
104(a)(1) in 1992, or, in the alternative, that amended section
10-12 allows petitioner’s previously received disability pension
amounts to be retroactively redesignated and excluded from gross
income during the year in issue pursuant to section 104(a)(1).
We examine each of petitioners’ contentions in turn.
Section 104(a)(1) and Section 1.104-1(b), Income Tax Regs.
Section 61(a) provides that gross income includes all income
from whatever source derived. Certain income, however, may be
specifically excluded from gross income. See sec. 61(b).
Under section 104(a)(1), worker’s compensation amounts are
excluded from gross income. However, such exclusions have been
“strictly construed so as to conform with the general rule that
all income is taxable unless it is specifically excluded.”
McDowell v. Commissioner, T.C. Memo. 1997-500; see Kane v. United
States, 43 F.3d 1446,1449, 1451 (Fed. Cir. 1994); Take v.
Commissioner, 804 F.2d 553, 558 (9th Cir. 1986), affg. 82 T.C.
630 (1984).
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
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