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or are paid for by the employee. See sec. 104(a)(3). Therefore,
petitioner may exclude the amounts he received if he paid
premiums for the disability plan or if his employer paid premiums
and the premiums were includable in his gross income. See Tuka
v. Commissioner, supra at 3; Miley v. Commissioner, T.C. Memo.
2002-236. In Tuka, the Court stated:
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. * * *
[Tuka v. Commissioner, supra at 4.]
If an employer is the sole purchaser of a policy of accident or
health insurance for its employees (on either a group or
individual basis), the exclusion provided under section 104(a)(3)
does not apply to any amounts received by his employees through
such fund or insurance. Sec. 1.104-1(d), Income Tax Regs.
Petitioner argues that the benefits he received are not
includable in his income because he paid the premiums for the
policy. The policy specifically states that the plan was paid
for by ATC, the parent of petitioner’s employer. Petitioner does
not dispute the assertion by Connecticut General, relied on by
respondent, in a stipulated exhibit, that the premiums paid were
not included in his taxable income. Petitioner has presented no
evidence, reason, or authority to apply the exception under
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