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.
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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.
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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.
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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.
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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.
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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.
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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.
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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
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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...)
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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.
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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...)
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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).”
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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.
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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.
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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).
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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
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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.
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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.