- 4 -
income can be found at section 104(a)(1) for “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
workmen’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.” This exclusion has been strictly
construed to conform with the general rule that all income is
taxable unless it is specifically excluded. See Kane v. United
States, 43 F.3d 1446, 1449, 1451 (Fed. Cir. 1994).
Where administrative rules or regulations have “the force
and effect of law”, they will be found to be the equivalent of a
statute for purposes of section 1.104-1(b), Income Tax Regs.
Dyer v. Commissioner, 71 T.C. 560, 562 (1979). As explained in
Rutter v. Commissioner, 760 F.2d 466, 468 (2d Cir. 1985), affg.
T.C. Memo. 1984-525:
A regulation, like a statute, is a rule of general
applicability promulgated by a public agency to govern
conduct within the agency’s jurisdiction. A labor
contract, unlike a statute, is an agreement between
union and employer, modifiable at any time. That
* * * [a] labor contract involved a public employer is
irrelevant to the legislative purposes behind the
workmen’s compensation exclusion, and does not convert
the contract into a “statute”.
Where the language of a collective bargaining agreement is
by legislative act incorporated by reference into a municipal
Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011