Section 104 Does Not Apply to Disability Payments Made Pursuant to Labor Agreements: Wallace v. United States
In Wallace v. United States, the Seventh Circuit held that disability payments made pursuant to a labor contract are not excludable from gross income under section 104(a)(1) because they were not received under a workmen's compensation act. The court rejected the taxpayer's argument that the state workmen's compensation board's decision to credit the employer for the payments changed them into workmen's compensation. ...
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