                         T.C. Memo. 1999-57



                       UNITED STATES TAX COURT



                 WILLIAM E. LEVESQUE, Petitioner v.
            COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 22348-95.                        Filed March 1, 1999.



     William E. Levesque, pro se.

     Carmino J. Santaniello, for respondent.



                         MEMORANDUM OPINION


     COLVIN, Judge:    Respondent determined a deficiency in

petitioner's income tax of $1,836 for 1992.      The issues for

decision are:

     1.     Whether pension payments of $7,1011 that petitioner

received from his former municipal employer (Pawtucket, Rhode

Island) in 1992 are excludable from gross income under section



     1
         This amount is rounded to the nearest dollar.
                                - 2 -

104(a)(1) as amounts received under a worker's compensation act

or a statute in the nature of a worker's compensation act.    We

hold that they are not.

     2.   Whether the $7,101 is excluded from income for 1992 on

the grounds that Pawtucket and respondent violated the Americans

with Disabilities Act of 1990 (ADA), Pub. L. 101-336, sec. 2, 104

Stat. 328 (current version at 42 U.S.C. sec. 12101 (1994)).      We

hold that it is not.

     3.   Whether including the $7,101 in petitioner's income is

unfair discrimination.    We hold that it is not.

     The parties submitted this case fully stipulated.    Rule 122.

Section references are to the Internal Revenue Code.    Unless

otherwise indicated, Rule references are to the Tax Court Rules

of Practice and Procedure.

                             Background

A.   Petitioner

     Petitioner lived in the city of Pawtucket, Rhode Island

(Pawtucket), when he filed the petition in this case.    He was

born on May 11, 1935.

     Petitioner began employment as a firefighter with Pawtucket

on May 14, 1961.   During his career as a firefighter, petitioner

received several promotions and rose to the rank of lieutenant.

He was a member of the International Association of Firefighters,

Local No. 1261 (the union) from 1961 to September 4, 1992.
                               - 3 -

B.   Petitioner's Disability Pension

     Pawtucket and the union had a collective bargaining

agreement that covered July 1, 1991, to June 30, 1993 (the

firefighter agreement).   As a member of the union, petitioner was

entitled to receive pension benefits under article II, sections

59-14 to 59-28.1 of the Pawtucket City Code, entitled

"Firefighters' and Police Pension Fund".

     Section 59-20 of the Pawtucket City Code provides that a

firefighter may retire after completing 20 years of service and

receive a regular service pension equal to 50 percent of his or

her average 3 highest years' salary.   Firefighters who retire

after more than 20 years of service may receive an additional

retirement benefit under section 59-21 of the Pawtucket City Code

of 2 percent for each year of service over 20 years, but not more

than an additional 5 years, with a maximum retirement benefit of

60 percent.   The firefighter agreement has identical provisions.

     Under section 59-24.A of the Pawtucket City Code, police

officers and firefighters who become totally and permanently

disabled may receive disability pensions equal to 66-2/3 percent

of their highest years' salaries.   However, section 59-24.B of

the Pawtucket City Code provides that a disability pension

received under section 59-24.A of the Pawtucket City Code

converts to a regular service pension when the employee reaches

his or her normal retirement date "as though he or she had not

been disabled."   Thus, an employee who becomes disabled after

completing 25 years of service is not entitled to a 66-2/3-
                              - 4 -

percent disability pension and instead receives a 60-percent

pension under section 59-21 of the Pawtucket City Code.   The

firefighter agreement has identical provisions.

     Petitioner could not work from January 2, 1991, to March 12,

1992, because of a work-related injury.   During that time,

petitioner received his regular wages from Pawtucket under the

firefighter agreement.

     On March 12, 1992, Martin E. Joyce, Jr. (Joyce), Pawtucket's

director of human resources, notified petitioner that he would

automatically be placed on a service retirement if he did not

return to work by July 2, 1992.   Petitioner never returned to

work as a firefighter.

     On March 20, 1992, Joseph E. Burns (Burns), Pawtucket's

acting fire chief, wrote a letter to petitioner in which he

stated in part:

     You are hereby notified that you have been out injured
     since 1/2/91. On July 2, 1992 you will reach 18 months
     on disability and you have to return to work prior to
     20 months of disability or you will be placed on
     service retirement.

     On August 18, 1992, Burns wrote a letter to petitioner in

which he said:

     On September 2, 1992, your 20 months on disability will
     be exhausted.

     According to the contract agreement between the City of
     Pawtucket and Local #1261, disability pension benefits
     only apply to those with under 25 years of service.
     Because you have over 31 years of service with the fire
     department, please contact the Human Resource
     Department to file for your retirement in accordance
     with the benefits of your contract.
                                - 5 -

     On September 1, 1992, Raymond W. Houle, Jr., Pawtucket's

director of public safety, wrote a letter "to whom it may

concern" in which he stated:

          In accordance with the Collective Bargaining
     Agreement between the City of Pawtucket and Local 1261,
     International Association of Fire Fighters, Article XV,
     Section 3 and Section 6 and also the Charter of the
     City of Pawtucket, specifically, the revised
     ordinances, Chapter 23, Section 23-2.2 Paragraph B.

          Lieutenant William E. Levesque is hereby placed on
     disability retirement on the normal retirement list for
     Fire Fighters due to fact that he has been out 18
     months on a service connected disability. Please
     contact the Human Resources Division to fill out all
     necessary paperwork in order that it can be processed
     in a timely manner.

     On September 4, 1992, Jack Rahill (Rahill), Pawtucket's

director of finance, wrote to Joyce about petitioner's service

retirement.   Rahill stated in part:

     Pursuant to c.1406 of the ordinance of the City of
     Pawtucket, approved 06/29/73 and the current bargaining
     agreement between the City of Pawtucket and the
     I.A.F.F., the following figures are submitted for your
     records. To insure accuracy please compare this data
     with your calculations and notify me as soon as
     possible of any errors in omission, calculations or
     interpretation.

     Rahill calculated petitioner's pension benefits on the basis

of the following information.   On September 4, 1992,2 petitioner

had 31 years and 3 months of service as a firefighter.   Pawtucket

awarded to petitioner a pension under section 59-21 of the

Pawtucket City Code equal to 60 percent of his average 3 highest

years' salary because he had more than 25 years of service when


     2
       The parties stipulated that petitioner had 31 years and 3
months of service as of Sept. 4, 1991. However, Exhibits 5-E and
7-G show that the correct date is Sept. 4, 1992.
                               - 6 -

he retired.   Rahill calculated that petitioner's annual pension

benefit was $22,038.37 ($36,730.62 x 60%).   His monthly pension

benefit was $1,836.53.

     On September 8, 1992, Joyce wrote a letter to Benefit Plan

Services of State Street Bank & Trust Co. about petitioner's

retirement, stating:

     Mr. William E. Levesque has retired from the City of
     Pawtucket effective September 4, 1992.

     Mr. Levesque is entitled to a partial check in the
     amount of $1,591.72 for the month of September only and
     all subsequent checks will be for the full pension
     amount of $1,836.53.

     Please forward Mr. Levesque's pension checks to:

                          119 Hunts Avenue
                          Pawtucket, RI 02861

     Mr. Levesque's monthly pension amount is $1,836.53. He
     will receive a cost of living every September 1st of
     1.5%. Mr. Levesque has elected to have no Federal or
     State Tax deductions from his monthly pension check.

     If you have any questions pertaining to this
     correspondence, please contact this office.

     In 1992, petitioner received pension payments from Pawtucket

totaling $7,101.   That amount equaled 60 percent of his pay from

his retirement date to December 31, 1992.

C.   Petitioner's Tax Return

     Petitioner timely filed his 1992 Federal income tax return

in which he reported income and deductions for the taxable year

1992 using the cash receipts and disbursements method of

accounting.   Petitioner attached a copy of Form 1099-R to his

1992 Federal income tax return.   It showed that he had received

the $7,101.   Petitioner did not include any of that amount in his
                                 - 7 -

1992 gross income.   He attached the following statement to his

return:

     Compensation received by the taxpayer, a firefighter
     injured in the line of duty, and paid as mandated by
     section 45-19-1 of the General Laws of Rhode Island,
     1954 as amended, is excluded from gross income under
     I.R.C. section 104(a) and regulation section 1.104-
     1(b).

                            Discussion

A.   Exclusion Under Section 104(a)(1)

     1.   Background

     Respondent determined and contends that petitioner's pension

payments of $7,101 for 1992 should be included in income.

Petitioner contends that his pension payments of $7,101 for 1992

are excludable from gross income under section 104(a)(1).    We

agree with respondent.

     Section 104(a)(1) provides that gross income does not

include amounts received under worker's compensation acts as

compensation for personal injuries or sickness.   For benefits to

qualify for exclusion under section 104(a)(1), the worker's

compensation act at issue must restrict benefits to work-related

personal injuries or sickness.    See Rutter v. Commissioner, 760

F.2d 466, 468 (2d Cir. 1985), affg. T.C. Memo. 1984-525; Take v.

Commissioner, 82 T.C. 630, 634 (1984), affd. 804 F.2d 553 (9th

Cir. 1986); Haar v. Commissioner, 78 T.C. 864, 868 (1982), affd.

per curiam 709 F.2d 1206 (8th Cir. 1983).   If a statute under

which benefits are paid does not restrict benefits to work-

related personal injuries or sickness, the fact that the claimant

was injured on the job or in the line of duty is irrelevant.      See
                                 - 8 -

Rutter v. Commissioner, supra; Green v. Commissioner, T.C. Memo.

1994-264, affd. 60 F.3d 142 (2d Cir. 1995); Curmon v.

Commissioner, T.C. Memo. 1991-432.       Disability payments received

under a collective bargaining agreement are not excludable under

section 104(a)(1).     See Rutter v. Commissioner, supra at 468;

McDowell v. Commissioner, T.C. Memo. 1997-500.

     Petitioner bears the burden of proving that respondent's

determination is incorrect.    See Rule 142(a); Welch v. Helvering,

290 U.S. 111, 115 (1933).

     2.     Analysis

     Petitioner did not include in income the $7,101 in pension

payments that he received from Pawtucket in 1992.      Petitioner

contends that the disability payments were in lieu of worker's

compensation because he had been injured on the job and forced to

retire.    Petitioner contends that he is being penalized for 31

years of dedicated service because he can no longer work because

of job-related injuries.    We disagree.    Those payments were at

the regular retirement rate of 60 percent of petitioner's average

3 years' highest salary under section 59-21 of the Pawtucket City

Code because he had more than 25 years of service when he

retired.    His pension payments were not made under a statute in

the nature of a worker's compensation act, and section 104(a)(1)

does not apply.    Section 59-21 of the Pawtucket City Code did not

provide that petitioner would be paid only if he had work-related

injuries.    Thus, the pension payments of $7,101 that were made

under section 59-21 of the Pawtucket City Code are not in lieu of
                               - 9 -

worker's compensation for purposes of section 104(a)(1).    See

Rutter v. Commissioner, supra; Green v. Commissioner, supra;

Curmon v. Commissioner, supra.

     In Mabry v. Commissioner, T.C. Memo. 1985-328, and Wiedmaier

v. Commissioner, T.C. Memo. 1984-540, affd. 774 F.2d 109 (6th

Cir. 1985), the taxpayers initially received disability payments

but were later transferred to a general service pension computed

on the basis of the number of years of service.   We held that the

benefits became taxable when each taxpayer was transferred to a

general pension.   Petitioner did not initially receive 66-2/3-

percent disability pension payments, and so this situation is, if

anything, stronger for respondent than that in Mabry v.

Commissioner, supra, or Wiedmaier v. Commissioner, supra.

     In Picard v. Commissioner, ___ F.3d ___ (9th Cir., Jan. 26,

1999), revg. T.C. Memo. 1997-320, the U.S. Court of Appeals for

the Ninth Circuit held that pension benefits paid to a disabled

worker remained excludable under section 104 where the pension

was reduced, but the taxpayer was not transferred from a

disability pension to a general pension.   We need not consider

the holding of the Court of Appeals in Picard because

petitioner's pension benefit was paid under the general pension

provisions of the Pawtucket City Code.

     Petitioner contends that we should treat his payments as if

they were in lieu of worker's compensation because on June 22,

1995, the Pawtucket City Council amended the ordinance to state

that disability benefits are in lieu of worker's compensation.
                              - 10 -

We rejected a similar argument in McDowell v. Commissioner,

supra.   In McDowell, a Pawtucket firefighter who had been injured

on the job in 1989 contended that the June 22, 1995, amendment

retroactively made the Pawtucket City ordinance a worker's

compensation statute under section 104(a)(1).    We concluded in

McDowell:   "Even if the amendment were to be given retrospective

effect, it would not cause the ordinance to be a statute in the

nature of a worker's compensation act."    The taxpayer's argument

failed in McDowell where retroactivity of the amendments to

Pawtucket disability pension ordinances was at issue.

Petitioner's retroactivity argument is even less persuasive here

because he was paid under the regular service pension ordinance.

B.   Americans with Disabilities Act

     Petitioner contends that the payments of $7,101 should not

be included in income in 1992 because he has suffered economic

discrimination, and that he had decreased purchasing power

because of his injuries in violation of ADA section 2, 42 U.S.C.

section 12101.   Petitioner contends that Pawtucket's and

respondent's policies discriminate against disabled persons.    We

disagree.   Petitioner cited no authority that the ADA, and not

the Internal Revenue Code, controls whether petitioner's pension

payments are taxable.   Even if he did, petitioner would not be

entitled to relief under the ADA here.    ADA section 202, 42

U.S.C. section 12132, provides:3


     3
       The Americans with Disabilities Act of 1990, Pub. L. 101-
336, sec. 203, 104 Stat. 337 (current version at 42 U.S.C. sec.
                                                   (continued...)
                               - 11 -

          Subject to the provisions of this subchapter, no
     qualified individual with a disability shall, by reason
     of such disability, be excluded from participation in
     or be denied the benefits of the services, programs, or
     activities of a public entity, or be subjected to
     discrimination by any such entity.

     To establish that the ADA was violated, petitioner must show

that:    (1) He was disabled, (2) he was denied a public benefit,

and (3) the denial was by reason of his disability.    See Kornblau

v. Dade County, 86 F.3d 193, 194 (11th Cir. 1996).

     Petitioner contends that he was denied a public benefit,

i.e., the right to exclude income, because he is disabled.     We

disagree.    The pension which Pawtucket pays to petitioner under

section 59-21 of the Pawtucket City Code was not based on

disability.    The ADA was not violated because petitioner was not

denied a public benefit by reason of his disability.    More

importantly, the taxation of his pension benefits is governed by

the Internal Revenue Code, not the ADA.

C.   Whether Treatment of Petitioner Is Discriminatory

     Petitioner contends that respondent's determination is

unfair because payments received by other firefighters throughout

the country who have been injured on the job have been excluded

from income.    There is no evidence in the record showing how

other firefighters were treated or the legal structure of their


     3
      (...continued)
12133 (1994)) provides:

          The remedies, procedures, and rights set forth in
     section 794a of Title 29 shall be the remedies,
     procedures, and rights this subchapter provides to any
     person alleging discrimination on the basis of
     disability in violation of section 12132 of this title.
                               - 12 -

benefits.   Petitioner cited no authority that anyone whose

benefits were structured like his was treated differently than

our holding here.    We conclude that petitioner's discrimination

claim lacks merit.

D.   Conclusion

     We conclude that the pension payments of $7,101 that

petitioner received in 1992 are not excludable from income under

section 104(a)(1).

     To reflect the foregoing,


                                          Decision will be entered

                                     for respondent.
