Asa Eugene Pearson - Page 4

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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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