Thomas D. Tuka - Page 6




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          cannot accept petitioner’s argument that, in reality, the                   
          contributions were made by U.S. Airways employees, including                
          petitioner, via the wage concessions.  To accept petitioner’s               
          position would essentially qualify any negotiated disability                
          package for exclusion under section 104(a)(3) since any such                
          package could be construed as a substitute for wages that                   
          employees might otherwise receive.  We cannot agree that Congress           
          intended section 104(a)(3) to be read so broadly as to exclude              
          accident or health insurance benefits attributable to wage                  
          concessions made in a negotiated bargaining process.                        
               Although section 104(a)(3) is not explicit on the subject,             
          it clearly contemplates that exemption of benefits depends on               
          whether contributions to an accident and health insurance plan              
          involve after-tax dollars.  Indeed, if an employee is to exclude            
          disability benefits attributable to employer contributions, those           
          contributions must have been includable in the employee’s gross             
          income.  Sec. 104(a)(3).  Petitioner asks this Court to accept              
          that wage concessions, which reduced the wages he might have                
          otherwise received, but which were not taxed, represent                     
          contributions that he made to an accident or health insurance               
          plan for purposes of section 104(a)(3).  This would be contrary             
          to the underlying intent that Congress had in enacting that Code            
          section and the limitations that it imposed on exclusion therein.           








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