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1(b), Income Tax Regs., and concluded that the benefits received
by the taxpayer in Benjamin were not excludable from gross income
because the benefits were made with reference to the taxpayer’s
length of service.
The Court agrees with respondent. Since petitioner
stipulated that the distributions were made with reference to her
length of service with the City of San Leandro, under section
1.104-1(b), Income Tax Regs., the distributions are not
excludable from gross income.
Petitioner argues that the distributions nevertheless
qualify for exclusion from gross income because they were made
under Cal. Govt. Code (West 2003), section 21151. Petitioner
contends that Cal. Govt. Code section 21151 is akin to a worker’s
compensation because it conditions eligibility for benefits on
the existence of a work-related injury or sickness, called
“industrial disability” under the California statute, without
regard to age or amount of service. “Industrial” in this context
means disability or death as a result of injury or disease
arising out of and in the course of employment. See Cal. Govt.
Code sec. 20046 (West 2003).
Cal. Govt. Code sec. 21151 (West 2003), in pertinent part,
provides:
Section 21151. Patrol, state safety, state
industrial, state peace officer/firefighter, or local
safety members; local or state miscellaneous members
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