- 7 - before us is whether such disability payments are exempt under section 104(a)(1). Section 61(a) provides that gross income includes all income from whatever source derived. Certain income, however, may be specifically excluded from gross income. See sec. 61(b). Under section 104(a)(1), worker’s compensation amounts are excluded from gross income. However, such exclusions have been “strictly construed so as to conform with the general rule that all income is taxable unless it is specifically excluded.” McDowell v. Commissioner, T.C. Memo. 1997-500; see Take v. Commissioner, 804 F.2d 553, 558 (9th Cir. 1986), affg. 82 T.C. 630 (1984). Section 104(a)(1) excludes from gross income “amounts received under workmen’s compensation acts as compensation for personal injuries or sickness”. Section 1.104-1(b), Income Tax 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.” “Workmen’s compensation act” is defined as a statute which requires as a precondition to eligibility for benefits that the injury be incurred in the course of employment. Take v. Commissioner, supra at 557. A statute is not considered to be inPage: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011