- 16 -
In advancing the foregoing contentions, petitioners misun-
derstand and/or misstate the provisions of section 105(b).
Section 105(b) on which petitioners rely provides in pertinent
part:
SEC. 105. AMOUNTS RECEIVED UNDER ACCIDENT AND HEALTH
PLANS.
* * * * * * *
(b) Amounts Expended for Medical Care.--
* * * gross income does not include amounts
referred to in subsection (a) if such amounts
are paid, directly or indirectly, to the
taxpayer to reimburse the taxpayer for ex-
penses incurred by him for the medical care
(as defined in section 213(d)) of the tax-
payer, his spouse, and his dependents * * *.
[Emphasis added.]
Contrary to petitioners’ contentions, section 105(b) addresses a
situation where certain amounts described in section 105(a)15 are
paid, directly or indirectly, to a taxpayer to reimburse the
taxpayer for the expenses that such taxpayer incurred for the
medical care of such taxpayer, such taxpayer’s spouse, and such
taxpayer’s dependents.
15Sec. 105(a) provides:
(a) Amounts Attributable to Employer
Contributions.--Except as otherwise provided in this
section, amounts received by an employee through acci-
dent or health insurance for personal injuries or
sickness shall be included in gross income to the
extent such amounts (1) are attributable to contribu-
tions by the employer which were not includible in the
gross income of the employee, or (2) are paid by the
employer.
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