                     T.C. Memo. 2002-319



                UNITED STATES TAX COURT



   RAYMOND J. AND JACQUELYN M. BYRNE, Petitioners v.
      COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket No. 130-01.               Filed December 30, 2002.


     P suffered a permanent disability that arose out
of, and in the course of, his employment as a municipal
court judge. P was awarded a disability retirement
under the Judges’ Retirement Law, Cal. Govt. Code secs.
75060(a) and 75061(a) (West 1993 & Supp. 2002), which
provides for a disability retirement if a judge has
been credited with at least 2 years of judicial service
or “the disability is a result of injury or disease
arising out of and in the course of judicial service.”
P seeks to exclude from gross income under sec.
104(a)(1), I.R.C., the payment P received in 1997. R
argues that the Judges’ Retirement Law is not in the
nature of a workers’ compensation act and the payment
is not excludable.

     Held: Under sec. 1.104-1(b), Income Tax Regs.,
gross income does not include amounts received under a
statute in the nature of a workers’ compensation act.
A statute that does not distinguish between work-
related injuries and other types of injuries is not in
the nature of a workers’ compensation act. Rutter v.
                               - 2 -

     Commissioner, 760 F.2d 466, 468 (2d Cir. 1985), affg.
     T.C. Memo. 1984-525. However, benefits received under
     a “dual-purpose statute”, i.e., a statute which
     authorizes payments for work-related and non-work-
     related disabilities, may qualify for exclusion if they
     are received under some specific provision which
     restricts the payment of benefits to cases of work-
     related disabilities. Cal. Govt. Code sec. 75061(a)
     contains one clause which restricts the payment of
     benefits to cases of work-related disabilities. Thus,
     that portion of the Judges’ Retirement Law is in the
     nature of a workers’ compensation act. P is entitled
     to exclude the payment that he received in 1997.



     Robert R. Rubin, for petitioners.

     Steven J. Mopsick, for respondent.



                        MEMORANDUM OPINION


     RUWE, Judge:   Respondent determined a deficiency of $14,178

in petitioners’ Federal income tax and an accuracy-related

penalty of $2,835 pursuant to section 6662(a) for 1997.1

Respondent concedes the accuracy-related penalty, and the issue

for decision is whether petitioner Raymond J. Byrne (Judge Byrne)

properly excluded from gross income under section 104(a)(1)

certain disability retirement payments that he received under the

California Judges’ Retirement Law.




     1
      Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the tax year in issue,
and all Rule references are to the Tax Court Rules of Practice
and Procedure.
                               - 3 -

                            Background

     The parties submitted this case fully stipulated pursuant to

Rule 122.   The stipulation of facts and the attached exhibits are

incorporated herein by this reference.   Petitioners resided in

Union, Washington, at the time of filing the petition.

     Judge Byrne was born on July 29, 1928.   On June 3, 1980, he

was elected to a 6-year term as municipal court judge for Sonoma

County, California, and he took office on January 5, 1981.     Judge

Byrne’s term as a municipal court judge did not expire until

December 31, 1986; however, his service as a judge effectively

ended on June 5, 1986, when he suffered a permanent disability

that arose out of, and in the course of, his employment.    The

permanent disability was a mental injury that was caused by an

exceptionally heavy workload and his inability to cope with the

ramifications of his judicial decisions.   As a result of job-

related stress, Judge Byrne sank into a major depression which

prevented him from performing his job.

     On or about September 29, 1986, Judge Byrne filed an

application for disability retirement under the Judges’

Retirement Law.2   On December 10, 1986, his application was

denied by the Commission on Judicial Performance (commission).

However, on or about November 30, 1989, the application was

     2
      The Judges’ Retirement System is administered by the Board
of Administration, California Public Employees’ Retirement System
(Cal. PERS). To participate, judges must contribute 8 percent of
their salaries.
                               - 4 -

approved after the submission of additional evidence.   At the

time the application was approved, the commission possessed

medical evidence that Judge Byrne’s disability was sustained

during the course of his employment as a judge.   On December 14,

1989, the chairperson of the commission and the Chief Justice of

the Supreme Court of California signed a certificate of

retirement, and Judge Byrne began receiving disability retirement

benefits as of that date.3

     On February 16, 1993, the California Workers’ Compensation

Appeals Board found that Judge Byrne sustained an injury to his

psyche arising out of, and in the course of, his employment and

that the injury caused total permanent disability and awarded him

a permanent disability indemnity of $224 a week for life.

Petitioners’ exclusion of these payments from gross income is not

in dispute.

     In 1997, Judge Byrne received $63,745.56 from the Judges’

Retirement System.   Of this amount, $1,259.40 represented a

return of his contributions.   Cal. PERS issued a Form 1099-R,

Distributions from Pensions, Annuities, Retirement or Profit-

Sharing Plans, IRAs, Insurance Contracts, etc., to Judge Byrne in

which it reported a gross distribution of $63,745.56 and a

     3
      A dispute arose over the effective date of Judge Byrne’s
retirement and whether he was entitled to additional benefits for
the period before Dec. 14, 1989. In a stipulated settlement
executed by Cal. PERS, the commission, and Judge Byrne, Cal. PERS
agreed to pay benefits of $148,192.97 for the period between Jan.
1, 1987, and Dec. 13, 1989.
                                - 5 -

taxable amount of $62,486.16.    Petitioners excluded the

$62,486.16 from gross income on their 1997 return.     Respondent

examined petitioners’ return and determined that this amount was

not excludable under section 104(a)(1).

                            Discussion

     Gross income includes all income from whatever source

derived, including pensions and compensation for services.      Sec.

61(a).   Under section 104(a)(1), gross income does not include

amounts received under workers’ compensation acts as compensation

for personal injuries or sickness.      The regulations promulgated

under section 104(a)(1) expand the reach of that section to

encompass “a statute in the nature of a workmen’s compensation

act which provides compensation to employees for personal

injuries or sickness incurred in the course of employment.”     Sec.

1.104-1(b), Income Tax Regs.    A statute is in the nature of a

workers’ compensation act if it allows disability payments solely

for service-related personal injury or sickness.4     Haar v.

Commissioner, 78 T.C. 864, 868 (1982), affd. 709 F.2d 1206 (8th

Cir. 1983).   A statute that does not distinguish between work-

related injuries and other types of injuries is not in the nature



     4
      A law that conditions eligibility for benefits on the
existence of a work-related injury or sickness may qualify as a
workers’ compensation act for purposes of sec. 104 even though
those benefits are styled “disability retirement benefits.” Take
v. Commissioner, 804 F.2d 553, 557 (9th Cir. 1986), affg. 82 T.C.
630 (1984); Rev. Rul. 83-91, 1983-1 C.B. 38.
                               - 6 -

of a workers’ compensation act.   Rutter v. Commissioner, 760 F.2d

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

     It is undisputed that Judge Byrne suffered an injury which

arose out of, and in the course of, his judicial service.

However, we must determine whether he received the disability

retirement benefits under a statute in the nature of a workers’

compensation act.   “If the statute does not qualify, then whether

the injury was in fact work-related is irrelevant.”     Take v.

Commissioner, 804 F.2d 553, 558 (9th Cir. 1986), affg. 82 T.C.

630 (1984).

     The “statute” we examine in making this determination is the

California Judges’ Retirement Law.     Cal. Govt. Code (CGC) secs.

75000-75111 (West 1993 & Supp. 2002).    Under article 2,

Retirement for Service, CGC section 75025, judges are eligible

for retirement on the basis of age and years of service.5    CGC

sections 75060(a) and 75061(a) are contained in article 3,

Disability Retirement, and those sections provide:

     75060.   Mental or physical disability; consents to and
              approval of retirement; certificate; filling
              vacancy.

          (a) Any judge who is unable to discharge efficiently
     the duties of his or her office by reason of mental or
     physical disability that is or is likely to become permanent
     may, with his or her consent and with the approval of the


     5
      To qualify for a service retirement, a judge must be at
least 60 years of age and must have 10-20 years of service
depending on the judge’s age. Judge Byrne did not qualify for
service retirement under CGC sec. 75025.
                               - 7 -

     Chief Justice or Acting Chief Justice and the Commission on
     Judicial Performance, be retired from office. * * *

                *    *    *    *       *   *   *

     75061.   Disability retirement; prerequisites.

          (a) Any person who becomes a judge during the period
     of January 1, 1980, through December 31, 1988, shall not be
     eligible to be retired for disability unless the judge is
     credited with at least two years of judicial service or
     unless the disability is a result of injury or disease
     arising out of and in the course of judicial service.

Judges who are retired under CGC sections 75025 and 75060(a) are

eligible for benefits which are calculated and paid pursuant to

article 3.6, Benefits Payable, CGC sections 75075 (West 1993) and

75076(a) (West Supp. 2002):

     75075.   Election of benefits.

          Any judge hereafter retiring pursuant to Section 75025
     or 75060 may elect to receive the benefits accorded by this
     article if he or she retires for service or disability prior
     to the end of the term of office during which he or she
     attains the age of 70 years.

                *    *    *    *       *   *   *

     75076.   Retirement allowances; contributions for prior
              service.

          (a) A judge who qualifies, as prescribed in Section
     75075, to receive the benefits accorded by this article
     shall receive a retirement allowance equal to 65 percent of
     the salary payable, at the time payment of the allowance
     falls due, to the judge holding the judicial office to which
     he or she was last elected or appointed; except that if upon
     retirement a judge has received credit for 20 or more years
     of service rendered prior to the expiration of the time
     within which the judge is eligible to elect to receive the
     benefits accorded by this article and for which he or she
     has contributed to the Judges’ Retirement Fund his or her
     retirement allowance shall equal 75 percent of that salary.
                                 - 8 -

     The Judges’ Retirement Law is not a workers’ compensation

act, and it is not in its entirety a statute in the nature of a

workers’ compensation act.    Nevertheless, benefits received under

the Judges’ Retirement Law may still qualify for exclusion if it

is a “dual-purpose statute”, as petitioners argue.    See Neill v.

Commissioner, 17 T.C. 1015 (1951); Burgess v. Commissioner, T.C.

Memo. 1986-228, affd. without published opinion 822 F.2d 61 (9th

Cir. 1987); Craft v. United States, 879 F. Supp. 925 (S.D. Ind.

1995); Frye v. United States, 72 F. Supp. 405 (D.D.C. 1947).     “A

dual-purpose statute is one which authorizes payments for work-

related, as well as non-work-related disabilities and may provide

other pension benefits.”     Kane v. United States, 28 Fed. Cl. 10,

13 (1993), affd. 43 F.3d 1446 (Fed. Cir. 1994).    To qualify as a

dual-purpose statute, the statute must contain some specific

provision which restricts the payment of benefits to cases of

work-related disabilities.     Id. at 14; see also Rutter v.

Commissioner, supra at 468.

     Petitioners argue that the Judges’ Retirement Law is a dual-

purpose statute because CGC section 75061(a) “has one provision

that provides for retirement based solely on injury or sickness

arising out of employment, and also one provision providing for

retirement based on years of service.”    Respondent contends that

CGC section 75060 makes no distinction between injuries which are

work related and injuries which are not work related and that CGC

section 75061 modifies CGC section 75060 but does not add any new
                               - 9 -

eligibility criteria.6   Respondent adds that CGC section 75061

“simply excludes from eligibility, any judge who seeks disability

retirement for a non-line-of-duty injury if he has less than two

* * * years of service”.

     We generally look only to the face of a statute in

determining whether it has a dual purpose.   CGC section 75061(a)

on its face provides for retirement in the case of a disability

that is the result of injury or disease arising out of, and in

the course of, judicial service.   Thus, the Judges’ Retirement

Law contains a specific provision that awards benefits solely for

a work-related disability.

     A simple recitation in a statutory enactment of certain

“magic language” may not be alone sufficient to establish a dual-

purpose statute.   However, CGC section 75061(a) does distinguish

between work-related and non-work-related disabilities because

all judges with work-related disabilities are eligible for

retirement under CGC section 75060(a), but judges with non-work-

related injuries can retire only if they have been credited with

sufficient years of service; i.e., at least 2 years of service.7

     6
      CGC sec. 75060 was previously at issue in Golden v.
Commissioner, T.C. Memo. 1971-162. We did not decide whether the
statute had a dual purpose, and we decided only that the taxpayer
had not shown his injuries were work related.
     7
      We note that as a practical matter, disabled judges who
have more than 2 years of service are eligible for retirement on
that basis even though they also sustained a work-related
disability. Indeed, Judge Byrne appears to fall within this
                                                   (continued...)
                                - 10 -

CGC section 75061(a) expresses an intention by the California

legislature to provide supplemental benefits in the nature of

workers’ compensation to all judges who sustain a work-related

disability.

     The statute in this case is not akin to the statute at issue

in Kane v. United States, 43 F.3d 1446 (Fed. Cir. 1994), a case

upon which respondent relies.    The statute at issue in that case,

28 U.S.C. sec. 372(a), provided:

          “Any justice or judge of the United States
     appointed to hold office during good behavior who
     becomes permanently disabled from performing his duties
     may retire from regular active service....

     ....

          Each justice or judge retiring under this section
     after serving ten years continuously or otherwise
     shall, during the remainder of his lifetime, receive
     the salary of the office. A justice or judge retiring
     under this section who has served less than ten years
     in all shall, during the remainder of his lifetime,
     receive one-half the salary of the office.” [Id. at
     1447-1448.]

The Court of Appeals for the Federal Circuit held that this

provision was not a dual-purpose statute, stating:

          However, unlike the statutes in Simms, Neill, and
     Frye, § 372(a) provides for disability retirement
     payments regardless of the cause of the disability. In
     contrast, Simms, Neill, and Frye involved statutes in
     which at least one provision, on its face, specifically

     7
      (...continued)
category as an individual eligible for either mode of disability
retirement under CGC sec. 75061(a). However, the actual basis
upon which the taxpayer was retired (i.e., for what purpose) is a
factual question that is secondary to the legal question whether
the statute has a dual purpose.
                              - 11 -

     provided for payments based solely on injury or
     sickness arising out of employment. The courts,
     therefore, were required to make an inquiry as to the
     portion of the statute under which payments were
     awarded. * * *

                *    *    *    *    *    *    *

          * * * Here, however, § 372(a) makes no
     distinction between payments for work-related and non-
     work-related disabilities and therefore it is not a
     dual-purpose statute. * * * [Id. at 1450.]

Unlike the statute in Kane, CGC section 75061(a) specifically

provides for disability retirement benefits based solely on

injury or disease arising out of, and in the course of, judicial

service.8   We hold that the Judges’ Retirement Law is a dual-

purpose statute.9

     8
      We point out that 28 U.S.C. sec. 372(a) is virtually
identical to CGC sec. 75060(a) in that neither of those
provisions distinguishes between work-related and non-work-
related disabilities. However, whereas 28 U.S.C. sec. 372(a)
stands alone, CGC sec. 75060(a) must be read together with CGC
sec. 75061(a), which defines the classes of persons covered under
the disability retirement system. That section does distinguish
between work-related and non-work-related disabilities.
     9
      Respondent argues that the benefits Judge Byrne received
were not in the nature of workers’ compensation. He points to
the award of permanent disability payments of $224 per week as “a
perfect example of how a person injured on the job is compensated
through worker’s compensation and is made whole for his injury”,
and he claims that the disability retirement payments, unlike the
permanent disability payments, were not intended to make Judge
Byrne “whole for his injury”. We might agree that the permanent
disability payments are a perfect example of compensation
received under a workers’ compensation act; however, the question
we have before us is whether the disability retirement benefits
were received under a statute in the nature of a workers’
compensation act. A statute in the nature of a workers’
compensation act gives “recovery in lieu of or supplemental to
workmen’s compensation which may be in excess of that received
                                                   (continued...)
                               - 12 -

     In the case of a dual-purpose statute, the appropriate focus

is on whether the taxpayer in fact received his disability

retirement benefits under that specific provision that is in the

nature of a workers’ compensation act.   Neill v. Commissioner, 17

T.C. at 1016 (“However, the mere fact that * * * [the taxpayer]

was incapacitated at the time of retirement is not sufficient to

bring the exemption into play if he was actually retired for

length of service rather than for disability incurred in [the]

line of duty.”).   Respondent suggests that regardless of whether

CGC section 75061(a) contains a specific provision in the nature

of a workers’ compensation act, we must look solely to those

provisions under which the disability retirement benefits were

calculated and paid, i.e., CGC sections 75075 and 75076(a), and

that those provisions are not in the nature of a workers’

compensation act.10   Petitioners argue that CGC sections 75075

and 75076 should be read in the context of “the entire statutory


     9
      (...continued)
under the ordinary workmen’s compensation act.” Rev. Rul. 59-
269, 1959-2 C.B. 39, 41. Thus, the compensatory elements of a
workers’ compensation act may differ from the substituted or
supplemental compensation under a statute in the nature of a
workers’ compensation act. We cannot agree that Judge Byrne’s
receipt of the permanent disability payments is especially
relevant to the question before us.
     10
      Respondent relies on a letter dated Oct. 26, 2001, from
Cal. PERS, which confirms that Judge Byrne was awarded 65 percent
of the salary payable to a municipal court judge as provided in
secs. 75075 and 75076(a). However, the same letter states that
Judge Byrne was “granted a disability retirement on December 14,
1989 as provided under Government Code section 75060(a).”
                                - 13 -

plan of the Judges’ Retirement Law, not simply [in relation] to

the portions of that law that provide for the amount of the

payments.”   We agree with petitioners.

     Respondent cites Kane v. United States, 43 F.3d at 1449, as

support for his position.   However, we could not find any

language in Kane which can be read so broadly as to state or

imply that we must look only to the specific provisions of a

statute under which payments are calculated and paid.    We find

respondent’s position to be short-sighted and an overly technical

reading of statements made in the relevant opinions.11   CGC

sections 75075 and 75076(a) do not themselves provide for

retirement, and only after going through the entire statutory

framework of the Judges’ Retirement Law, namely, CGC section

75025 or CGC sections 75060(a) and 75061(a), do we ultimately

reach the payment provisions.    The provisions under which Judge




     11
      Respondent cites the following language in Kane v. United
States, 43 F.3d 1446, 1450 (Fed. Cir. 1994): “The courts,
therefore, were required to make an inquiry as to the portion of
the statute under which payments were awarded.” Respondent has
taken this statement out of context. This statement was part of
a discussion involving Neill v. Commissioner, 17 T.C. 1015
(1951), and other cases, upon which petitioners rely. The
discussion suggests, contrary to respondent’s argument, that when
faced with a statute that has a dual purpose, courts must further
inquire as to whether the taxpayer was retired for a work-related
disability under that specific provision that is in the nature of
a workers’ compensation act or was retired on some other basis.
                               - 14 -

Byrne received his disability retirement benefits include CGC

sections 75060(a), 75061(a), 75075, and 75076(a).12

     As part of the same argument, respondent suggests that CGC

sections 75075 and 75076(a) provide the same benefits for a

service retirement under CGC section 75025 as a disability

retirement under CGC section 75060(a) and that this is “fatal” to

petitioners’ case.    We disagree.   Respondent’s position is not

only inconsistent with established caselaw, it is also

inconsistent with his own ruling positions.    See Stanley v.

United States, 140 F.3d 890 (10th Cir. 1998); Freeman v. United

States, 265 F.2d 66 (9th Cir. 1959); Givens v. Commissioner, 90

T.C. 1145, 1151 (1988); Dyer v. Commissioner, 71 T.C. 560, 562

(1979) (“whether a payment is in the nature of workmen’s

compensation depends upon whether the payment is made because of

injuries sustained in the line of duty, not upon the amount

paid”); Neill v. Commissioner, 17 T.C. 1015 (1951); Frye v.

United States, 72 F. Supp. 405 (D.D.C. 1947); Rev. Rul. 80-84,

1980-1 C.B. 35; Rev. Rul. 74-582, 1974-2 C.B. 34; Rev. Rul. 68-

10, 1968-1 C.B. 50.   We cannot agree that the mere fact that a

statutory scheme allows the same benefits for a disability




     12
      In Golden v. Commissioner, T.C. Memo. 1971-162, we also
dealt with a disability retirement under the California Judges’
Retirement Law. In our findings of fact, we noted that the
taxpayer was retired under CGC sec. 75060, and we addressed the
issues therein in that context.
                              - 15 -

retirement as for a service retirement is necessarily “fatal” to

petitioners’ case.13

     Respondent suggests that the benefits Judge Byrne received

are determined by reference to Judge Byrne’s length of service

and that this is in “direct contravention” of section 1.104-1(b),

Income Tax Regs.   That section provides:

     However, section 104(a)(1) does not apply to a
     retirement pension or annuity to the extent that it is
     determined by reference to the employee’s age or length
     of service * * *, even though the employee’s retirement
     is occasioned by an occupational injury or sickness.
     * * *

Respondent contends that “Article 3.6 which provides for the

amount of the benefit for both service and disability retirement,

provides for the identical pension which is determined by length

of service.”   For reasons similar to those stated above, we

cannot agree with respondent’s contention.   Although Judge Byrne

may receive the same amount of benefits under CGC sections 75075

and 75076 as a judge who retires on the basis of years of service

under CGC section 75025, Judge Byrne’s benefits were not received

     13
      We also question respondent’s assertion that a retired
judge receives the same benefits under CGC sec. 75025 as sec. CGC
75060(a). Respondent is correct that generally a retiree will
receive the same rate of benefits under either provision; i.e.,
65 percent of the judge’s salary. However, as we noted in Golden
v. Commissioner, supra, “retirement under section 75060 CGC may,
under some circumstances, have different consequences than
retirement under section 75025 CGC, see, e.g., secs, 75060.6,
75080 CGC”. Indeed, benefits received for a CGC sec. 75060(a)
retirement are forfeitable or subject to reduction if certain
conditions are met. See, e.g., CGC secs. 75060.6 (subsequent
medical examinations), 75080 (subsequent employment while less
than 70 years of age).
                               - 16 -

on that basis.    Judge Byrne received his benefits on the basis of

the commission’s finding that he was “unable to discharge

efficiently the duties of his said office by reason of such

mental disability, and that such disability is or is likely to

become permanent”.

       Respondent also suggests that CGC section 75061(a) does not

qualify as a statute in the nature of a workers’ compensation act

because an applicant qualifying for retirement under that

provision gets paid by reference to length of service.

Seemingly, respondent relies upon the fact that judges who have

been credited with at least 2 years of service are entitled to a

disability retirement regardless of whether their injuries are

incurred in the course of their employment.    However, CGC section

75061(a) contains two clauses.    The first clause, which awards a

disability retirement on the basis of a disability and length of

service, does not qualify as a statute in the nature of a

workers’ compensation act since it does not distinguish between

work-related disabilities and non-work-related disabilities.      As

we have stated more explicitly above, the second clause does

qualify as a statute in the nature of a workers’ compensation

act.    An applicant who receives a disability retirement under

that clause may exclude the benefits received thereunder.    Those

benefits are not disqualified for the reason that they could

theoretically have been awarded under some other statutory
                               - 17 -

provision that does not qualify as a statute in the nature of a

workers’ compensation act.14

     14
      The statute in this case is similar to the statute at
issue in Priv. Ltr. Rul. 1998-50-005 (Dec. 11, 1998). The
statute therein provided for “disability coverage to each member
who has at least five years of total service credit and
disability coverage for on-duty illness or injury to each member
who is a law enforcement officer, regardless of length of
service.” Consistent with our opinion herein, the Internal
Revenue Service ruled as follows:

          The Statute contains two provisions for the
     payment of disability benefits. The first clause
     provides “disability coverage to each member who has at
     least five years of total service credit.” The second
     clause provides “disability coverage for on-duty
     illness or injury to each member who is a law
     enforcement officer, regardless of length of service.”
     The fact that one part of a statute is not a statute in
     the nature of a workmen’s compensation act (i.e., the
     first clause) does not preclude another part of the
     same statute from meeting the requirements of section
     104(a)(1) of the Code. This is true notwithstanding
     that the same disabilities may qualify for compensation
     under either provision. See, Take v. Commissioner, 82
     T.C. 630 (1984) aff’d 804 F2d 553 (9th Cir. 1986). The
     first clause of the Statute is not a statute in the
     nature of a workmen’s compensation act because it
     provides benefits regardless of the cause of the
     disability to employees with at least five years of
     total service credit. The second clause of the Statute
     provides compensation to law enforcement officers only
     for personal injuries or sickness incurred in the
     course of employment and regardless of length of
     service. Accordingly, the second clause of the Statute
     is a statute in the nature of a workmen’s compensation
     act.

Although private letter rulings are not precedent, sec.
6110(k)(3), they do reveal the interpretation put upon the
statute by the agency charged with the responsibility of
administering the revenue laws. Rowan Cos. v. United States, 452
U.S. 247, 261 n.17 (1981); Hanover Bank v. Commissioner, 369 U.S.
672, 686-687 (1962); Estate of Cristofani v. Commissioner, 97
T.C. 74, 84 n.5 (1991); Woods Inv. Co. v. Commissioner, 85 T.C.
                                                   (continued...)
                             - 18 -

     Finally, we note that the commission could have

theoretically awarded the benefits to Judge Byrne on the basis of

his having served more than 2 years as a judge or on the basis of

his work-related disability and that a factual issue could

conceivably have been raised regarding whether the benefits were

actually received under that portion of CGC section 75061(a) that

is in the nature of a workers’ compensation act.   Respondent does

not argue this issue on brief.   Indeed, in response to

petitioners’ argument that the burden of proof on this issue is

upon respondent pursuant to section 7491, respondent states that

“This case involves purely a legal question, namely whether the

California Judges’ Retirement Law is in the nature of a worker’s

compensation act.”15




     14
      (...continued)
274, 281 n.15 (1985); Thurman v. Commissioner, T.C. Memo. 1998-
233.
     15
      Under these circumstances, we need not decide who bears
the burden of proof under sec. 7491(a)(1). However, the parties
agree that the examination began on Mar. 31, 1999, and that none
of the limitations under sec. 7491(a)(2) are applicable.
Moreover, petitioners introduced credible evidence that the
commission had before it several reports which concluded that
Judge Byrne was disabled as a result of a work-related injury and
that it could have awarded the benefits on this basis.
                             - 19 -

     We hold that petitioners properly excluded from gross income

the disability retirement benefits that Judge Byrne received in

1997.



                                              Decision will be

                                         entered for petitioners.
