                     T.C. Summary Opinion 2001-24



                       UNITED STATES TAX COURT



                   HAYES P. DUPLANTIS, Petitioner v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 16710-98S.                       Filed March 7, 2001.



     Hayes P. Duplantis, pro se.

     Louis John Zeller, Jr., for respondent.



     CARLUZZO, Special Trial Judge:    This case was heard pursuant

to the provisions of section 7463 of the Internal Revenue Code in

effect at the time the petition was filed.    Subsequent section

references are to the Internal Revenue Code in effect for the

years in issue.    The decision to be entered is not reviewable by

any other court, and this opinion should not be cited as

authority.
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     Respondent determined deficiencies in and additions to

petitioner’s Federal income taxes as follows:

                                       Additions to Tax
     Year      Deficiency        Sec. 6651(a)(1)     Sec. 6654
     1992       $1,129                $282              $49
     1993        1,099                 274               46
     1994        1,069                 267               55
     1995        1,046                 262               57
     1996        1,196                 239               64


For each year, the issue for decision is whether long-term

disability payments received by petitioner are includable in

income.

Background

     Some of the facts have been stipulated and are so found.

At the time the petition was filed, petitioner resided in

Metairie, Louisiana.

     Petitioner was employed as a towboat captain by Ingram

Industries, Inc. (Ingram), from 1979 until he was injured in an

accident that occurred in 1982.    As an employee of Ingram,

petitioner was eligible for certain employee benefits, including

life insurance, medical care for himself and his family, and

long-term disability benefits.    These benefits were made

available to petitioner and other eligible employees of Ingram

through a group insurance plan (the plan) subscribed to by

Ingram underwritten by Jefferson-Pilot Life Insurance Co.

(Jefferson-Pilot).
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     Pursuant to the plan, petitioner contributed towards the

cost of life insurance for himself, accidental death and

dismemberment insurance for himself and his wife, medical

insurance for his dependents, and for benefits described as

“daily income while hospitalized”.     Petitioner’s contributions

for the above employee benefits were withheld from his salary.

The cost of the long-term disability coverage provided to

petitioner and other employees of Ingram covered under the plan

was paid entirely by Ingram.

     During 1982, while descending an interior stairway from the

towboat’s pilothouse, petitioner fell and severely injured his

back.   As a result of the injuries sustained in the fall,

petitioner was rendered totally and permanently disabled.     At

some point after the fall, he qualified for and began to receive

long-term disability payments under the plan (the disability

payments).   The disability payments were calculated based upon

petitioner’s salary, not on the nature of his injury.

     Pursuant to his coverage under the plan, petitioner received

disability payments of $13,378 in 1992, and $13,268 in each of

the years 1993, 1994, 1995, and 1996.     He did not file a Federal

income tax return for any of those years.

     Respondent determined that the disability payments are

includable in petitioner’s income in the year received.     Other

adjustments made in the notices of deficiency are not in dispute.
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Discussion

     The parties appear to agree that the plan constitutes an

accident or health plan within the meaning of sections 104(a)(3)

and 105(a), and we proceed as though it does.   Simply stated, the

statutory scheme framed by these sections allows a taxpayer to

exclude from income amounts received through accident or health

insurance plans if:   (1) The taxpayer paid for the insurance; or

(2) the amounts were attributable to contributions by the

taxpayer’s employer that were includable in the taxpayer’s gross

income.   See sec. 104(a)(3).   On the other hand, amounts received

by an employee through accident or health insurance for personal

injuries must be included in gross income to the extent such

amounts are attributable to contributions by the employer that

were not includable in the gross income of the employee.    See

sec. 105(a).

     Petitioner does not claim that Ingram’s contributions to the

plan on his behalf were includable or included in his gross

income for any year, and the version of section 106 in effect

during the relevant periods suggests that they were not.

Instead, petitioner argues that the disability payments are

excludable from income because he paid for the applicable

insurance coverage.

     According to petitioner, Ingram withheld amounts from his

salary for long-term disability coverage under the plan.
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However, Ingram’s records, as well as the records of Jefferson-

Pilot, demonstrate that long-term disability coverage was

provided to Ingram’s employees at no cost to the employees.

Although amounts were withheld from petitioner’s salary for other

benefits under the plan, no amounts were withheld for long-term

disability coverage.    Given the passage of time involved, it

would appear that petitioner’s memory on the point simply is not

accurate.

     The disability payments were received on account of, and

attributed to, accident or health insurance paid for by Ingram.

Pursuant to section 105(a), those amounts are includable and must

be included in petitioner’s income in the year received, and we

so hold.    Respondent’s determinations in this regard are

therefore sustained.

     Reviewed and adopted as the report of the Small Tax Case

Division.

     Based on the foregoing and to reflect respondent’s

concessions of the additions to tax,

                                             Decision will be

                                        entered for respondent

                                        with respect to the

                                        deficiencies and for

                                        petitioner with respect

                                        to the additions to tax.
