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“your permanent disability benefits from 01/01/97 through
10/27/97.” It is unclear from this record whether SCRMA is
associated with petitioner’s workers’ compensation claim with the
State of California or whether it is associated with Compton
Unified’s group insurance plans.
Gross income includes all income from whatever source
derived, unless excludable by a specific provision of the
Internal Revenue Code. Sec. 61(a). One exclusion from gross
income can be found at section 104(a)(1) for “amounts received
under workmen’s compensation acts as compensation for personal
injuries or sickness”. Another exclusion can be found at section
104(a)(3) for amounts received through accident or health
insurance for personal injuries or sickness, except if such
amounts are (a) attributable to contributions by the employer
which were not includable in the gross income of the employee, or
(b) are paid by the employer. See also sec. 105(a).
Taxpayers reporting income on the cash method of accounting,
such as petitioner, must include an item of income for the
taxable year in which the item is actually or constructively
received. See sec. 451(a); see also Polone v. Commissioner, T.C.
Memo. 2003-339; Knoll v. Commissioner, T.C. Memo. 2003-277
(applying this principle in the context of a section 104 case).
The record does not support petitioner’s claim for
exclusion. Petitioner applied for workers’ compensation benefits
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Last modified: May 25, 2011