Tony G. and Roberta A. Montgomery - Page 6

                                        - 5 -                                         

          provisions of section 86.  Maki v. Commissioner, T.C. Memo. 1996-           
          209; see Ernzen v. United States, 875 F.2d 228 (9th Cir. 1989);             
          Wallers v. United States, 847 F.2d 1279 (7th Cir. 1988).                    
               Section 61(a) provides that gross income includes all income           
          from whatever source derived, unless excludable by a specific               
          provision of the Code.  Moreover, section 86(a), for the year at            
          issue, provides that gross income includes Social Security                  
          benefits in an amount equal to a prescribed formula therein                 
          provided.  Petitioner has not challenged the computation by                 
          respondent under this formula.                                              
               The Court rejects petitioner’s contention that disability              
          Social Security benefits constitute accident or health insurance            
          under section 104(a)(3), or that the Social Security benefits               
          come under the “umbrella” of the tax-exempt benefits he was                 
          receiving from the employer-sponsored insurance.  The repeal by             
          Congress of former section 105(d), which specifically provided              
          for the exclusion from income of certain disability benefits and            
          the enactment of section 86, with the section 86(d)(1)(A)                   
          provision that the term “Social Security benefits” includes                 
          benefits received under title II of the Social Security Act                 
          (which includes disability Social Security benefits), indicates             
          quite clearly to the Court that Congress did not intend that                

               2(...continued)                                                        
          disability insurance benefit payments.                                      




Page:  Previous  1  2  3  4  5  6  7  Next

Last modified: May 25, 2011