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Petitioner testified that sometime after 1991 an IRS
representative told him to stop reporting the MetLife payments on
his Federal income tax return because the payments constituted
nontaxable income. In accordance with the advice he purportedly
received from the IRS, petitioner stopped reporting the payments
from MetLife.
In 1996, petitioner received a Form W-2, Wage and Tax
Statement, from MetLife reporting the amount he had received from
MetLife for the 1995 taxable year. Petitioner did not report the
1995 payments from MetLife and did not attach the Form W-2 he
received from MetLife to his 1995 return.
In the notice of deficiency, respondent determined that
petitioner failed to report $72 of taxable wages from General
Motors in 1995, and further determined that petitioner should
have included $9,633, the entire amount of MetLife’s 1995
payments to petitioner, in gross income under section 105(a) for
the 1995 taxable year.
Gross income does not include amounts received through
accident or health insurance for personal injuries or sickness to
the extent such amounts are: (1) Attributable to contributions
by the employer which were includable in the gross income of the
employee, or (2) paid for by the employee. See sec. 104(a)(3).
Section 105(a) provides, however, that amounts received by
an employee through accident or health insurance are includable
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Last modified: May 25, 2011