- 9 - liability is properly at issue, we review that issue de novo. Sego v. Commissioner, supra at 610; Goza v. Commissioner, supra at 181. If the validity of the underlying tax liability is not at issue, we review the Commissioner’s determination for abuse of discretion. Sego v. Commissioner, supra at 610. Mr. Cotler did not receive a notice of deficiency for 1997 or for 1998, he raised his underlying liability at the section 6330 hearing, and he is entitled to contest the underlying tax liability for 1997 and 1998.4 Montgomery v. Commissioner, 122 T.C. 1, 5 (2004). II. Disability Benefits Mr. Cotler argues that the disability benefits that he received in 1997 and 1998 are excludable from gross income pursuant to section 104(a)(3). Respondent determined that the amounts are not excluded from gross income. Gross income includes income from whatever source derived. Sec. 61(a). Gross income, however, does not include amounts received through accident and health insurance for personal injuries or sickness other than amounts received by an employee, to the extent such amounts: (1) Are attributable to contributions by the employer which were not includable in the gross income of the employee, or (2) are paid by the employer. Sec. 104(a)(3); see also Tuka v. Commissioner, 120 T.C. 1 (2003), 4 Respondent does not argue that Mr. Cotler is precluded from challenging his underlying liability.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 NextLast modified: November 10, 2007