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section 86(a), or whether, as petitioners contend, such benefits
are excludable from gross income under sections 104(a)(3) and
105(3).2 If the Court holds that such benefits are includable in
income, petitioners contend that section 86 violates the Equal
Protection Clause of the U.S. Constitution.
Some of the facts were stipulated, and those facts, with the
annexed exhibits, are so found and are incorporated herein by
reference. Petitioners' legal residence at the time the petition
was filed was Madison, Tennessee.
Because of a diabetic condition, petitioner was decreed
totally disabled by the Social Security Administration in March
1987. Petitioner has been receiving disability Social Security
benefits since that date. His condition necessitated that he
leave his employment as an assistant terminal manager for a
freight trucking company. Petitioner Rachel A. Thomas (Mrs.
Thomas) was employed in the accounting department of a
corporation during 1997.
For the year 1997, petitioner received $14,097 in disability
Social Security benefits. He also received $16,740 in benefits
2 Petitioners' reference to sec. 105(3) is in error
because there is no such subsection. The Court believes, based
on the arguments raised in their trial memorandum, that
petitioners' reference may be to section 105(e) relating to
certain types of accident or health plans or employee sickness
and disability funds that are treated as accident or health
insurance plans within the meaning of sec. 104. The Court,
therefore, will address petitioners' contention under sec.
105(e).
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