- 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 municipalPage: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011