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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. ...

Kevin A. Rinker

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