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IHSS payments were income but, after conferring with petitioners,
concluded that the IHSS payments were not considered gross
income.
In this case, respondent cites Bannon v. Commissioner, 99
T.C. 59 (1992), as controlling. In Bannon, which involved
circumstances very similar to those in the present case, in which
a taxpayer gave her child round-the-clock total daily care, in
excess of the hours listed on the taxpayer’s biweekly timecard
and paid for by the IHSS, the Court analyzed the law in detail
and stated, id. at 66:
Petitioner’s situation is sympathetic. She is to
be lauded for the beneficence and compassion she
has shown to her disabled daughter. But we
cannot grant petitioner the relief she seeks. *
* * We hold that petitioner’s receipt of
payments under California’s in-home supportive
services program did not constitute a welfare
benefit to her and is therefore includable in her
income for Federal income tax purposes.
Although the Court has only previously addressed the
classification of IHSS payments as they apply to adult children,
California law makes no distinction between adult children and
minor children for purposes of IHSS payments. See Miller v.
Woods, 148 Cal. App. 3d 862 (1983). Live-in relatives, whether
caring for minor or adult children, receive the same level of
compensation from IHSS as nonrelated contract workers. Id. at
877. Furthermore, although parents of a minor child are required
by California law to volunteer their services to care for that
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