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an accident or health benefit is attributable to the
contributions of the employee, then that portion of the benefit
is excludable from gross income under section 104(a)(3). See
sec. 1.72-15(c)(1), Income Tax Regs. If, however, the plan does
not expressly provide that the accident or health benefits are to
be provided with employee contributions and the portion of
employee contributions to be used for such purpose, it will be
presumed that none of the employee contributions is used to
provide such benefits. See sec. 1.72-15(c)(2), Income Tax Regs.
Absent disability, no railroad retirement benefits are paid
until the employee reaches age 62 or is at least 60 years old and
has completed 30 years of service. See Railroad Retirement Act
of 1974, Pub. L. 93-445, sec. 2(a)(10), 88 Stat. 1312, currently
codified at 45 U.S.C. sec. 231(a)(1) (1994). Petitioners have
not presented any evidence regarding Mr. Howle’s length of
service. We thus conclude that Mr. Howle was not eligible for
retirement until he turned 62 on October 31, 1997, and that the
railroad retirement benefits petitioners received in 1997 were on
account of disability until such date.
We have found no provision in the Railroad Retirement Act
expressly stating that disability benefits are to be provided
with employee contributions. See 45 U.S.C. 231. Therefore, all
of the Tier 2 benefits received by petitioners through
October 31, 1997, are to be included in gross income.
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