Darwin J. Albers & Peggy L. Albers - Page 16




                                       - 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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