- 6 -
Schleier, 515 U.S. 323, 327 (1995); Commissioner v. Glenshaw
Glass Co., 348 U.S. 426, 429-431 (1955); Banaitis v.
Commissioner, 340 F.3d 1074, 1079 (9th Cir. 2003), affg. in part
and revg. in part on another ground T.C. Memo. 2002-5. “Pensions
and retirement allowances paid either by the Government or by
private persons constitute gross income unless excluded by law.”
Sec. 1.61-11(a), Income Tax Regs.
Section 104, in contrast, provides an exclusion with respect
to compensation for injuries or sickness. Such exclusions from
gross income are construed narrowly. Commissioner v. Schleier,
supra at 328; United States v. Burke, 504 U.S. 229, 248 (1992);
Banaitis v. Commissioner, supra at 1079. Section 104(a) provides
in pertinent part:
SEC. 104. COMPENSATION FOR INJURIES OR SICKNESS.
(a) In General.--Except in the case of amounts
attributable to (and not in excess of) deductions allowed
under section 213 (relating to medical, etc., expenses) for
any prior taxable year, gross income does not include–-
* * * * * * *
(4) amounts received as a pension, annuity, or
similar allowance for personal injuries or sickness
resulting from active service in the armed forces of
any country or in the Coast and Geodetic Survey or the
Public Health Service, or as a disability annuity
payable under the provisions of section 808 of the
Foreign Service Act of 1980; * * *
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