- 5 -
taxable amount of $62,486.16. Petitioners excluded the
$62,486.16 from gross income on their 1997 return. Respondent
examined petitioners’ return and determined that this amount was
not excludable under section 104(a)(1).
Discussion
Gross income includes all income from whatever source
derived, including pensions and compensation for services. Sec.
61(a). Under section 104(a)(1), gross income does not include
amounts received under workers’ compensation acts as compensation
for personal injuries or sickness. The regulations promulgated
under section 104(a)(1) expand the reach of that section to
encompass “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.” Sec.
1.104-1(b), Income Tax Regs. A statute is in the nature of a
workers’ compensation act if it allows disability payments solely
for service-related personal injury or sickness.4 Haar v.
Commissioner, 78 T.C. 864, 868 (1982), affd. 709 F.2d 1206 (8th
Cir. 1983). A statute that does not distinguish between work-
related injuries and other types of injuries is not in the nature
4A law that conditions eligibility for benefits on the
existence of a work-related injury or sickness may qualify as a
workers’ compensation act for purposes of sec. 104 even though
those benefits are styled “disability retirement benefits.” Take
v. Commissioner, 804 F.2d 553, 557 (9th Cir. 1986), affg. 82 T.C.
630 (1984); Rev. Rul. 83-91, 1983-1 C.B. 38.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011