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social security benefits potentially subject to tax
will include any workmen’s compensation whose receipt
caused a reduction in social security disability
benefits. For example, if an individual were entitled
to $10,000 of social security disability benefits but
received only $6,000 because of the receipt of $4,000
of workmen’s compensation benefits, then for purposes
of the provisions taxing social security benefits, the
individual will be considered to have received $10,000
of social security benefits. [H. Rept. 98-25, at 26
(1983), 1983 U.S.C.C.A.N. 219, 244.]
Petitioners argue that section 86(d)(3) “does not call for
offsets to be considered taxable income.” They contend that the
legislative intent of the statute is “to tax the Social Security
benefits which were to be paid in place of the workers’
compensation benefits once workers’ compensation benefits were
terminated”.
Petitioners’ interpretation of the statute is without merit.
The language of section 86(d)(3) is unambiguous. Neither the
clear language of the statute nor the explanation in the
legislative history conceives that an actual payment from the
Social Security Administration is required in order to have an
offset. The provisions of the statute apply to worker’s
compensation benefits paid from a private insurer. See Willis v.
Commissioner, T.C. Memo. 1997-290.
Accordingly, we uphold respondent’s determination that
petitioner’s Social Security benefits for 1996 and 1997 include
those amounts reported on his Forms SSA-1099 as attributable to
those years.
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