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provision to section 1718. It holds that the receipt is a
payment for services rendered even though it is intended for
therapeutic or rehabilitative services, and, because it is a
payment for services, it is included in the recipient’s gross
income. Revenue rulings are generally not accorded deference by
the Court. E.g., McLaulin v. Commissioner, 115 T.C. 255, 263
(2000), affd. 276 F.3d 1269 (11th Cir. 2001). We may, however,
take a revenue ruling into account where we judge the underlying
rationale to be sound. Id. We do not judge that to be the case
here.
Rev. Rul. 65-18, supra, appears to have been issued in
response to the addition of section 618 to title 38 by the Act of
Aug. 6, 1962, section 2(1), 76 Stat. 308 (discussed supra in
section III.F.1 of this report). The ruling acknowledges
Congress’s purpose, as set out in S. Rept. 1693, 87th Cong., 2d
Sess. (1962), of avoiding confusion and controversy with respect
to the Federal employee status of patients participating in a
therapeutic program and states that the law enables the VA to
prescribe the “conditions and benefits” that will best serve the
therapeutic and rehabilitative objectives of the program. Rev.
Rul. 65-18, 1965-1 C.B. at 33. The ruling gives no consideration
to the question of whether the remuneration in question
constitutes an exempt veterans’ benefit within the meaning of the
applicable predecessors of section 139(a)(3) and 38 U.S.C.
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