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Regs., interprets section 104(a)(1) to exempt amounts received
under a worker's compensation act, or 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.”
In this case, the record does not reflect whether petitioner
received his disability payments under section 10-12 of the
Cranston City Code or section 24.4 of the collective bargaining
agreement between the city and the union. We therefore examine
both section 10-12 and section 24.4 to decide whether
petitioner’s disability payments are excludable from gross income
pursuant to section 104(a)(1) or section 1.104-1(b), Income Tax
Regs.
Prior to amendment, the pertinent parts of section 10-12, in
effect when petitioner retired in January 1984, provided as
follows:
Whenever an officer or member of the permanent
fire department who has not attained fifty-five years
of age shall become unfit to perform active duty by
reason of physical infirmity or other causes, such
officer or member upon the recommendation in writing of
the mayor, may, in the discretion of the city council
by a majority vote of the city council, be retired from
active service and placed on the pension list, and when
so retired he shall be paid annually from the firemen’s
pension fund in equal monthly payments until his fifty-
fifth birthday a sum equal to one-half of his annual
salary as defined in subsection (c) of the preceding
section.
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