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petitioner, respondent determined that petitioner’s disability
benefits were taxable. Petitioners timely petitioned this Court.
Discussion
Petitioner contends that the disability benefits petitioner
received under a workmen’s compensation act are not taxable
because they were not paid by the Social Security Administration.
We disagree.
Gross income includes all income from whatever source
derived unless excluded by a provision of the Internal Revenue
Code. Sec. 61(a). Section 86(a) provides that gross income
includes Social Security benefits in an amount equal to a
prescribed formula.2 Social Security benefits mean any amount
received by a taxpayer by reason of entitlement to a monthly
benefit under title II of the Social Security Act. Sec.
86(d)(1)(A). Title II of the Social Security Act provides for
disability benefits. See 42 U.S.C. secs. 401-434 (2000).
Prior to 1984, disability payments received by a taxpayer
who retired due to a permanent disability were excluded from
gross income pursuant to section 105(d). The Social Security
Amendments of 1983, Pub. L. 98-21, sec. 122(b), 97 Stat. 87,
repealed section 105(d) and the limited exclusion of disability
2Petitioners have not challenged the formula provided in
sec. 86(a).
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