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broadly to encompass all gains except those specifically excluded
by Congress. See Commissioner v. Glenshaw Glass Co., 348 U.S.
426, 430 (1955).
Consistent with this rule, payments by an employer to an
employee through accident and health insurance for personal
injuries or sickness are generally included in gross income.
Sec. 105(a). An exception exists, however. Employees may
exclude from gross income employer-paid “reimbursements” for
medical care expenses. See secs. 105(b), 106(a), 213(d); Schmidt
v. Commissioner, T.C. Memo. 2003-325; see also Rev. Rul. 71-588,
1971-2 C.B. 91 (sanctioning payments from an employer-spouse to
an employee-spouse).8 We must therefore determine whether the
exception applies and whether petitioners may exclude benefits
from income.
To qualify for excludability, benefits must be received
under a proper plan, notice or knowledge of the plan must be
reasonably available to those covered, and there must be a bona
8We are aware that revenue rulings are not binding on this
Court or other Federal courts. Rauenhorst v. Commissioner, 119
T.C. 157, 171 (2002); Frazier v. Commissioner, 111 T.C. 243, 248
(1998). The public has a right, however, to rely on positions
taken by the Commissioner in published guidance. Alumax, Inc. v.
Commissioner, 109 T.C. 133, 163 n.12 (1997), affd. 165 F.3d 822
(11th Cir. 1999); Am. Campaign Acad. v. Commissioner, 92 T.C.
1053, 1070 (1989); Nissho Iwai Am. Corp. v. Commissioner, 89 T.C.
765, 778 (1987); see also Rev. Proc. 89-14, sec. 7.01(5), 1989-1
C.B. 814, 815 (taxpayers may rely on published revenue rulings in
determining the tax treatment of their own transactions).
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